Volkswagen Introduces its ambitious “PEAK EV” project which a stride towards localizing EV production with the first EV SUV expected to hit Indian roads by 2026
Localizing EVs for India
After extensive discussions with Mahindra yielded no agreement, the Volkswagen Group, with a staggering valuation of Euro 272.9 billion, embarked on its journey to localize EVs for the Indian market.
Spearheaded by Skoda Auto Volkswagen India, the “PEAK EV” project aims to introduce a series of electric vehicles, starting in 2026, that cater to the unique needs of the Indian consumer.
The Born EV Platform
Skoda Auto Volkswagen India plans to localize the MEB21G architecture, laying the foundation for a multitude of SUVs under both the Volkswagen and Skoda brands.
With an estimated potential volume exceeding half a million vehicles, this platform will not only serve the domestic market but also contribute to exports, with production to be done at the Chakan plant.
Strategic Focus on SUVs
While the project details are still in the fog, the primary focus appears to be on the entry- and mid-size SUV segments. This aligns with the growing preference for SUVs in the Indian automotive market.
The first SUV under the PEAK EV project, likely to bear the Volkswagen badge, is anticipated to reach volumes of 50,000 units for both domestic and export markets.
Skoda’s Unique Position
Skoda Auto Volkswagen’s upcoming small SUV, positioned below the Kushaq and Taigun, is set to don only the Skoda badge. This strategic move positions Skoda as an early entrant in the EV race, showcasing a commitment to innovation and adaptability in the evolving Indian automotive landscape.
CEO’s Perspective
Piyush Arora, MD and CEO of Skoda Auto Volkswagen India, emphasizes India’s crucial role in the Volkswagen Group’s growth strategy. In an official response, Arora outlines plans to expand the electric vehicle portfolio in the country.
The strategy includes introducing EVs from various brands, both as fully built-up units and locally manufactured models, showcasing a commitment to diverse powertrain options.
Strategic Investment
Thomas Schafer, the global CEO of Volkswagen AG, acknowledges the need for substantial investment in localization. The VW Group’s planned Euro 180 billion investment over the next five years includes India as a key contender. Schafer notes that an additional investment of at least Euro 1 billion will be essential for localizing the EV platform successfully.
Challenges and Alternatives
Schafer acknowledges the challenges in terms of cost and scale in the Indian market. The VW Group is exploring alternatives, with a keen interest in localizing the MEB21 platform. While optimistic about the potential, Schafer acknowledges the complexities of creating a sound business case, especially regarding localizing the battery.
Future Prospects
The PEAK EV project signifies Volkswagen’s commitment to the electric future of India. With strategic investments, localized production, and a focus on SUVs, Volkswagen aims to carve a significant niche in the ever growing Indian EV market.