Volkswagen is reevaluating its investment approach in India and has reduced development spending on electric vehicles in the country, according to a Bloomberg report citing people familiar with the matter.
The German carmaker has scaled back its planned funding for a new EV platform from around $1 billion to approximately $700 million and is seeking local partners as it considers broader adjustments to its India strategy.
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The reported shift comes as India prepares to introduce stricter emissions regulations in 2027, increasing pressure on manufacturers to transition to cleaner technologies. Volkswagen’s first locally produced electric model is not expected until 2028, prompting the company to explore interim measures while assessing its long-term potential in a market where growth has remained limited.
One option under review is the temporary import of electric vehicles from Europe, which would depend on the conclusion of a trade agreement between India and the European Union.
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High import duties have historically deterred global automakers from bringing EVs into India, and recent government indications of relaxed import conditions remain tied to commitments for long-term investment.
Volkswagen is also pursuing strategic partnerships in the country. Discussions with the Mahindra Group ended without agreement last year, and the company is now in talks with several potential partners.
These include the JSW Group, a joint venture partner of Chinese automaker SAIC, as well as at least one Indian contract manufacturer. The automaker is assessing these options as it looks to balance investment risks with regulatory demands and market realities.
