VW Group Launches PEAK EV Project In India, Aiming For Mainstream E-SUV By 2026

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German Automaker Accelerates Efforts to Localize Electric Vehicles in India with ‘PEAK EV’ Project, Aiming for Multiple SUVs under Volkswagen and Skoda Brands from 2026 with High Export Prospects.

After extensive research in the electric vehicle sector, the Volkswagen Group, valued at 272.9 billion euros, has initiated the localisation of its electric vehicle in India with the PEAK EV project. This initiative is expected to produce multiple vehicles from 2026.

Skoda Auto Volkswagen India, the primary entity of Volkswagen Group in India, has begun developing the Born EV platform independently. Earlier, there were discussions with Mahindra & Mahindra about joint development of a small electric vehicle platform, but the company chose to proceed solo.

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Skoda Auto is planning to adapt the MEB21G architecture in India. This will likely result in the production of several SUVs under both Volkswagen and Skoda brands, with significant potential for exports. The projected volume from this platform in India exceeds half a million vehicles, focusing mainly on SUVs, particularly in the entry and midsize segments. The details of the project are still being finalized.

The first SUV EV, expected to carry the Volkswagen badge, aims for an initial production of 50,000 units for both domestic and international markets. This marks a major shift for the German brand towards all-electric vehicles in India. Skoda’s mainstream EV is anticipated to follow Volkswagen’s lead.

An interesting development is that Skoda Auto Volkswagen’s upcoming small SUV, positioned below the Skoda Kushaq and VW Taigun, will likely feature only the Skoda brand. Volkswagen aims to enter the market early in this segment.

Piyush Arora, MD and CEO of Skoda Auto Volkswagen India highlights India’s key role for the Volkswagen Group due to its strong economic growth. He mentions plans for expanding their electric vehicle footprint in the coming years, including introducing EVs from various brands, both as fully built-up units and locally manufactured models. The company’s portfolio will encompass both ICE and BEV models.

Thomas Schafer, the global CEO of Volkswagen AG, announced at the Munich Mobility Show 2023 an investment plan of 180 billion euros over the next five years, with each country, including India, vying for a portion. This move in India would require an additional investment of at least a billion euros. Schafer emphasized the need for careful allocation of this significant investment, noting India’s potential role in it. The investment will depend on various factors like volumes, localisation plans, and the number of brands involved.

Schafer also discussed the challenges of cost and scale for EVs in India, mentioning the exploration of two alternatives and the effort to create a strong business case. He expressed a desire to localize the MEB21 with a localized battery and increase export volumes from India.

Following Schafer’s visit to India in October, part of a series of meetings in India and Europe, Skoda Auto’s board has shown strong interest in exploring future growth opportunities in the country, leading to the advancement of the EV project.

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