Volkswagen Group has approved a fresh investment of €1 billion to support the development and launch of its next-generation models in India, including battery electric vehicles (BEVs), as part of its India 3.0 initiative, according to a report from The Economic Times. The decision marks the group’s first major commitment to locally produced electric vehicles for the Indian market.
The investment will be managed by Skoda Auto Volkswagen India Private Limited (SAVWIPL), the Group’s India arm, which oversees brands including Volkswagen, Skoda, Audi, Porsche, and Lamborghini. The upcoming product portfolio will include internal combustion engine (ICE), hybrid, and fully electric models, with SUVs and MPVs spanning 4.3 to 4.8 metres in length. These new models will be based on the CMP 21 platform — previously known as China Main Platform and derived from the MEB 31 architecture.
The latest funding round follows a period of uncertainty, partly stemming from lukewarm market response to four ICE models launched under the Group’s earlier €1 billion India 2.0 investment between 2021 and 2022. Investment delays were also linked to internal challenges and a $1.4 billion tax dispute with Indian authorities over alleged misclassification of imported goods.
Despite initial reservations, Volkswagen appears confident about CMP 21’s role in enabling a flexible product range across powertrains. While previously viewed as a China-specific architecture, the company has since renamed the platform to “Compact Main Platform” and indicated it can be adapted for plug-in hybrids and pure electric vehicles.
“This next round of investment represents a major shift in our localisation and electrification strategy in India,” a person familiar with the developments told The Economic Times. “It signals strong confidence from headquarters in the region’s long-term growth potential.”
In April, Business Standard reported that SAVWIPL had begun early development of a Skoda electric SUV around 4.5 metres in length — a model likely positioned in the Elroq-class segment — with former Skoda India Brand Director Petr Janeba confirming the initiative.
In addition to mainstream offerings, the Group is reportedly evaluating the feasibility of launching CMP 21-based Audi models in India, though no specifics on local manufacturing or assembly plans have been disclosed.