Key Highlights:
- Mahindra and Volkswagen are close to forming a 50:50 joint venture.
- The partnership will focus on electric SUVs for Indian and global markets.
- The agreement excludes Volkswagen and Skoda’s sedans and luxury brands.
- Production will take place at facilities in Chakan, near Pune.
Mahindra and Volkswagen Near Joint Venture for Electric SUVs
Mahindra & Mahindra (M&M) and Skoda Auto Volkswagen India (SAVWIPL) are reportedly close to finalizing a 50:50 joint venture. The partnership will focus on developing battery-powered SUVs for both Indian and global markets. This collaboration marks a significant milestone for India’s electric vehicle industry.
Focus on Electric and Fossil Fuel SUVs
The joint venture will primarily target the production of electric SUVs. However, it will also include fossil fuel-powered versions. The collaboration excludes Volkswagen and Skoda’s sedans and SUVs, as well as luxury brands like Audi and Porsche. Production will occur at SAVWIPL and Mahindra facilities in Chakan, near Pune.
Sharing Technology and Costs
Mahindra and Volkswagen plan to share technology, costs, and vehicle platforms. This partnership aims to leverage local expertise while distributing costs and risks. The two companies have been in discussions for several rounds, both virtually and in person, to finalize the agreement. A formal announcement is expected before the end of the year.
Foundation of the Partnership
The collaboration between VW Group and Mahindra began with a supply deal for Volkswagen’s MEB (Modular Electric Drive Matrix) platform components for Mahindra’s electric platform, the INGLO. This agreement was finalized in February 2024 after two years of negotiations.
Strategic Timing Amid Policy Changes
This partnership comes at a time when the Indian government is emphasizing electric vehicles and tightening carbon emission norms, which require substantial investments. Skoda has identified India as its second-most important market after Europe, especially after reducing its presence in China and exiting Russia. Meanwhile, Mahindra, which currently sells only the XUV4OO EV, plans to introduce seven more EV models by 2030.
Also Read: Why the Hyundai Alcazar EV is a Smart Move: Four Key Reasons
ELCTRIK Speaks
The anticipated joint venture between Mahindra and Volkswagen represents a strategic move in the rapidly evolving electric vehicle market in India. By combining their expertise and resources, both companies aim to meet the growing demand for electric SUVs while navigating the challenges posed by new regulations and the need for substantial investment. This partnership could play a pivotal role in shaping the future of EVs in India and beyond.
