Volkswagen Group, the German car giant, has revealed plans to introduce a budget-friendly electric vehicle (EV) in India by the latter half of the decade. Piyush Arora, CEO of Skoda Auto Volkswagen India, announced this initiative at an event held on Thursday.

Arora, who oversees Volkswagen Group's operations for five brands in India – Volkswagen, Skoda, Audi, Porsche, and Lamborghini – emphasized the necessity for significant investment to realize this goal. "We are actively developing an entry-level EV. It requires substantial investment, and to justify this, we need substantial sales volumes," he stated.

While Audi and Porsche currently offer EVs in India, the penetration of electric vehicles in the country is expected to be gradual. Arora hinted at the possibility of exporting the new EV to Southeast Asia, Gulf Cooperation Council (GCC) nations, and North Africa, leveraging the improving ease of exporting cars manufactured in India.

Arora highlighted the evolving regulatory and safety standards in India, making the country more globally competitive. This shift has facilitated a surge in exports for both Volkswagen and Skoda brands during the current fiscal year.

The Volkswagen Group's emphasis on electric vehicles is buoyed by India's favorable taxation policy for EVs. Arora mentioned that India taxes EVs at just 5%, whereas the tax on hybrids stands at 43%, slightly below the 48% levied on petrol cars. However, Arora indicated that the company might consider introducing hybrid vehicles with government support.

Additionally, Arora revealed that the Skoda Enyaq electric SUV is undergoing extensive testing for potential launch in India, although no specific timeline was provided.

India aims to have EVs account for at least 30% of passenger vehicle sales by 2030, a significant leap from the current 2% market share. This target encompasses various vehicle segments, ranging from small cars to sedans and SUVs.

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