IT Home, October 23 — According to Bloomberg today, Volkswagen Group has paused further investment in its electric vehicle project in India, awaiting a clearer business proposal from India’s JSW Group regarding a potential partnership.
According to insiders, Volkswagen has completed the related design work and can quickly advance the project using its previously developed low-cost electric vehicle platform once progress is made in negotiations. Volkswagen currently aims to clarify the commercial plan for the collaboration before deciding whether to continue investing funds.
This investment pause comes as Volkswagen advances its global cost-cutting initiative. Facing weak demand in Europe and intensified competition from Chinese automakers, Volkswagen is tightening its spending and seeking to reduce investment by approximately 15%. The company has also previously proposed cutting tens of thousands of jobs to lower operational costs.
Bloomberg reported in November 2025 that Volkswagen had reduced its platform development budget for its electric vehicle project in India from $1 billion (approximately RMB 6.688 billion at current exchange rates) to around $700 million (approximately RMB 4.682 billion at current exchange rates), a cut of about one-third. At the time, the company was seeking local Indian partners to share development costs.
In September this year, Volkswagen Group and JSW Group announced that they are exploring the establishment of a joint venture to develop, produce, and sell passenger vehicles in India for both domestic and export markets. The proposed collaboration covers internal combustion engine vehicles, battery electric vehicles, plug-in hybrid vehicles, and hybrid vehicles. At the time, Reuters reported that the partnership aims to help Volkswagen enhance localisation, expand its product lineup, and improve competitiveness in the Indian market.
Public reports indicate that Volkswagen has been operating in the Indian market for many years, but its market share remains limited, primarily through its Skoda brand and local operations in India. Currently, neither Volkswagen nor Skoda sells battery-electric passenger vehicles in India. Companies such as Tata Motors’ passenger vehicle division, Mahindra, and SAIC Motor’s MG brand are already competing in the local electric vehicle market, while overseas manufacturers including Vietnam’s VinFast, Tesla, and BYD are also vying for market share.
According to insiders, Volkswagen once considered introducing its CMP 21 electric vehicle architecture to India. However, to make the relevant models sufficiently price-competitive, the company still needs to increase its local sourcing of components and produce complete vehicles locally. The design work has been completed, but further investment in the project depends on the progress of negotiations with the JSW Group.
However, other potential obstacles remain in the negotiations between the two parties. On September 24, Bloomberg reported that the JSW Group expects Volkswagen to cover approximately $1.4 billion (approximately RMB 9.364 billion at current exchange rates) in Indian tax disputes, which could become a key point of contention in advancing their cooperation.
The market for battery-electric passenger vehicles in India remains relatively small, but sales are growing as more affordable models enter the market. According to data from India’s vehicle registration database, sales of battery-electric passenger vehicles in September this year nearly doubled year-over-year, exceeding 35,000 units.