Mahindra & Skoda VW Set to Power Up India’s EV Market with 50:50 Joint Venture on Battery-Powered SUVs

Mahindra & Mahindra (M&M) and Skoda Auto Volkswagen India (SAVWIPL) are nearing a 50:50 joint venture agreement. This partnership aims to share costs, technology, and vehicle platforms, with a strong focus on battery-powered SUVs for both Indian and international markets. An official announcement is expected by the end of the year.

Key Focus Areas:

While the joint venture will include some fossil fuel-based models, the primary focus will be on electric SUVs. This collaboration will utilise existing production plants in Chakan, near Pune, owned by both SAVWIPL and Mahindra. The vehicles sold under Volkswagen, Skoda, Audi, and Porsche brands will not be part of this agreement.

Strategic Importance:

This partnership is crucial for both companies. Mahindra plans to invest ₹12,000 crore in its EV business over the next three years, and this joint venture will help them achieve their goal of having electric vehicles make up 20-30% of their SUV sales by 2027. For the VW Group, this is a significant step in establishing a stronger presence in India’s growing auto market, where they have struggled to compete against Japanese, South Korean, and domestic brands.

Progress on Agreement:

The joint venture discussions have progressed through multiple rounds of virtual and in-person meetings. This collaboration follows an earlier supply agreement for components of Volkswagen’s MEB platform, which Mahindra will use in its upcoming Born Electric (BE) models.

Broader Impact:

For the VW Group, this move aligns with the Indian government’s push for electric vehicles and stricter carbon emission regulations, requiring significant investments. Skoda has identified India as a key market outside Europe, especially as they slow down operations in China and exit Russia. This partnership marks a significant step for Mahindra as they expand their presence in the EV market, with plans to launch seven new electric models by 2030.

Conclusion:

This joint venture could be a significant milestone for both Mahindra and Skoda Auto Volkswagen in India. It represents a major collaboration between an Indian and a global carmaker, aiming to tackle the evolving automotive market focused on electric vehicles.