IT News on October 23: According to a report by Bloomberg today, Volkswagen Group has suspended further investment in its electric vehicle projects in India, awaiting a more definitive business plan with the Indian JSW Group regarding potential cooperation.
Insiders revealed that Volkswagen has completed the relevant design work, and once negotiations between the two parties make progress, they can utilize the previously developed low-cost electric vehicle platform to rapidly advance the project. Volkswagen currently hopes to clarify the commercial plan for cooperation before deciding whether to continue investing funds.
This suspension of investment comes at a time when Volkswagen is pushing forward with its global cost-cutting plan. Faced with weak market demand in Europe and increasing competition from Chinese automakers, Volkswagen is taking more stringent control over its expenditures and seeking to reduce its investment scale by about 15%. The company has previously proposed plans to cut tens of thousands of jobs in order to lower operating costs.
Bloomberg previously reported in November 2025 that Volkswagen had cut the platform development budget for its electric vehicle project in India from $1 billion (Note from IT: Current exchange rate is approximately 6.688 billion RMB) to about $700 million (Current exchange rate is approximately 4.682 billion RMB), a reduction of about one-third. At that time, the company was looking for local Indian partners to share the development costs.
In September this year, Volkswagen Group and JSW Group announced that they were exploring the establishment of a joint venture, with plans to develop, produce, and sell passenger vehicles in India for export markets. The proposed cooperation covers internal combustion engine vehicles, pure electric vehicles, plug-in hybrid vehicles, and hybrid vehicles. Reuters reported at the time that this collaboration was aimed at helping Volkswagen increase its localization efforts, expand its product range, and improve its competitiveness in the Indian market.
Public reports indicate that Volkswagen has been operating in the Indian market for many years, yet its market share remains limited, mainly through the Skoda brand and its Indian operations. Currently, neither Volkswagen nor the Skoda brand sells pure electric passenger vehicles in India. Tata Motors' passenger vehicle business, Mahindra, as well as brands under SAIC Group such as MG, have already entered competition in the local electric vehicle market. Overseas manufacturers such as VinFast from Vietnam, Tesla, and BYD are also striving for market share.
Insiders say that Volkswagen has considered introducing its electric vehicle architecture, named CMP 21, to India. However, to make the related models competitively priced, the company still needs to increase the proportion of locally sourced components and produce the vehicles in India. The design work has been completed, but the further progress of the project depends on the negotiations with the JSW group.
However, there are other potential obstacles to the cooperation negotiations between the two parties. Bloomberg reported on September 24 that the JSW group hopes that Volkswagen will bear a tax dispute amount of approximately $1.4 billion (about 9.364 billion yuan at current exchange rates) in India, which could become one of the key points of disagreement that may hinder the progress of their cooperation.
The market scale for pure electric passenger vehicles in India is still relatively small at present, but with the gradual launch of models with lower prices, sales are on the rise. According to data from India's vehicle registration database, in September of this year, sales of pure electric passenger vehicles in India nearly doubled year-on-year, exceeding 35,000 units.
