VW's Skoda to invest in manufacturing EVs in India despite $1.4 bln tax demand overhang
Companies
Skoda to adapt EV technology from China for India market
Co will stay "single" and invest in India if no partner found
VW faces $1.4 bln tax demand over misclassification of imports
NEW DELHI, March 14 (Reuters) - Skoda Auto plans to manufacture electric cars in India and will invest in the country by itself if its search for a local partner fails, the Czech carmaker's CEO said, as its parent Volkswagen Group fights a $1.4 billion tax demand case.
VW's local unit Skoda Auto Volkswagen India is embroiled in a legal tussle with the country's tax department over allegations that it misclassified imports of some Audi, VW and Skoda cars to evade higher duties.
If the company loses the battle, against what it calls an "impossibly enormous" demand, it will need to fork out $2.8 billion including penalties and interest, which could become a matter of survival, one of VW's lawyers said last month.
CEO Klaus Zellmer told the media this week that he was unable to comment on the "ongoing, very critical procedure", but that Skoda is targeting India as it looks to the world's third-largest car market for growth outside Europe.
"(It) is still our will and our strategy to form a joint venture to be even stronger in India ... but if there's no right partner we stay single and be still attractive and successful," he told reporters at a post-earnings press conference.
Skoda has been leading Volkswagen's India strategy since 2018, but sales have remained low with the Volkswagen and Skoda brands together accounting for just 2% of India's 4 million units a year car market.
But with stricter vehicle fuel efficiency standards set to kick in from 2027, all carmakers will have to introduce EVs, and Skoda believes its access to the Volkswagen Group's EV technology might give it an edge.
"We can offer very innovative, very cost efficient solutions for battery electric vehicles, and this is our strategy also for India," Zellmer told reporters on the virtual call.
Skoda has an agreement with India's Mahindra & Mahindra (MAHM.NS), opens new tab to supply some EV components. Zellmer did not name Mahindra or any other company in terms of potential collaborators, but said talks were ongoing with partners with "local roots".
India, where small cars from Suzuki Motor (7269.T), opens new tab and Hyundai (HYUN.NS), opens new tab, (005380.KS), opens new tab dominate the roads, has proved a difficult market for Western carmakers.
But Skoda, which no longer has a big presence in China and exited Russia, says India is a "major focus" for its business.
The company has previously shown interest in a government programme that will offer incentives for local EV manufacturing.
It has also signed an initial agreement with the government in India's western Maharashtra state to invest about $1.7 billion to build EVs.
Zellmer said it was important for Skoda to get its portfolio right in India, a market he said was a "gateway" for Southeast Asia and the Middle East.
"We are really looking for us building on ... one of the biggest potential growth markets globally," he added.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Auto Blog
12 hours ago
- Auto Blog
2026 Porsche 911 Turbo Debuts This Year With A Hybrid For The First Time
By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. The features you're willing to give up depend on your budget. Find out which car tech, luxury touches, and connected services consumers are sacrificing for a lower price. Porsche 911 Turbo Gets Its Biggest Change Since 1974 In 1974, attendees at the Paris Motor Show bore witness to the debut of the first-ever turbocharged Porsche 911, arriving a year after the 911 RSR Turbo concept race car. After capping an incredible era with the special-edition 911 Turbo 50 Years at Monterey Car Week last year, we're in an era of significant change once again. Just as the 911 could not escape the performance and efficiency benefits of forced induction, so the Turbo S cannot escape the same promises or electrification. As part of the same 2025 half-year earnings call in which Porsche CEO Oliver Blume confirmed the evaluation of a new gas crossover for production by 2028, the arrival of the 992.2 generation of the most powerful 911 nameplate will take place later this year, and it will be a hybrid for the first time. 0:01 / 0:09 VW will introduce a sub-$20,000 EV, but probably not here Watch More The Decision Was Inevitable Source: Porsche We've seen this coming for some time. The 992.1 2025 911 Turbo S produces 640 horsepower and 590 lb-ft from its 3.7-liter twin-turbo boxer. Those figures were sufficient five years ago, but no longer. With the introduction of the 992.2 Carrera GTS last year, Porsche enlarged the 3.0-liter in the Carrera to a 3.6, yet with the help of the high-voltage T-Hybrid system, fuel consumption remained the same, turbo lag was reduced, and output jumped by 59 hp and 29 lb-ft to 532 hp/449 lb-ft. The result? The GTS T-Hybrid is quicker to 60 mph by 0.3 seconds and an impressive 8.7 seconds faster around the Nürburgring, despite an extra 103 pounds on the scales. Those sorts of performance benefits are too good to ignore for Porsche's AWD supercar killer. Although unconfirmed at this stage, we can be all but certain that the system will be a mild-hybrid with a small battery to keep weight as low as possible. An Electrified GT2 RS Now Seems Certain Source: SH Proshots/Autoblog We suspect an electric motor or two on the front axle could be paired with an electric turbocharger, but whether there will be one like the GTS or two like contemporary 911 Turbo and Turbo S models is more of a mystery. One makes sense for packaging, but perhaps Porsche will want a unique engine configuration for its fastest 911s. Since the ultimate 911, the GT2 RS, is traditionally an even more focused GT3 RS with a higher-output version of the engine in a 911 Turbo S and the deletion of the AWD system, it now seems that rumors of the incoming GT2 RS gaining a small hybrid system will prove to be true. It's even more difficult to stay competitive without a turbo – the 992.2 911 GT3's naturally aspirated engine required components from the GT3 RS and special new filters to meet emissions regulations while maintaining horsepower. Despite the best efforts of the engineers in Stuttgart, the inevitable trade-off was a loss in torque, so it's not inconceivable that even the GT3 might someday go hybrid, though Porsche will do everything in its power – including blaze trails in the development of synthetic fuels – to prevent that. Autoblog Newsletter Autoblog brings you car news; expert reviews and exciting pictures and video. Research and compare vehicles, too. Sign up or sign in with Google Facebook Microsoft Apple By signing up I agree to the Terms of Use and acknowledge that I have read the Privacy Policy . You may unsubscribe from email communication at anytime. While the inevitable weight penalty that will come with hybridizing the 911 Turbo is a tough pill to swallow, so was adapting to the turbo lag of the original widowmaker 50 years ago. Meeting emissions limits and customer expectations of performance inevitably leads to the implementation of new technologies, and that's kind of the point of the 911 Turbo in the first place. At least, that's how Porsche justifies putting the word on EVs anyway… About the Author Sebastian Cenizo View Profile
Scottish Sun
13 hours ago
- Scottish Sun
Three major car brands slash £1,500 off EV prices in huge boost for millions of Brits
The German car manufacturer has introduced a 'grant guarantee' scheme for some of its all-electric vehicles PLUGGED IN Three major car brands slash £1,500 off EV prices in huge boost for millions of Brits Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) THREE major car brands have slashed the price of some of its electric cars by £1,500, giving a boost to millions of Brits. The move by the Volkswagen Group includes brands from Volkswagen, Skoda and Cupra and comes ahead of the Government's new EV scheme. Sign up for Scottish Sun newsletter Sign up 4 A £650million grant will knock up to £3,750 off the price of low-priced EVs - with concerns raised over taxpayer funding and infrastructure issues Credit: Getty 4 The Volkswagen ID.3 will see it's price slashed by £1,500 Credit: Getty A new Electric Car Grant will see taxpayers foot the bill for EVs costing under £37,000, and only models from brands that have committed to a so-called Science-Based Target (SBT) for emissions. The grant worth £650million in total, which was announced by the government recently, will see prices slashed for some fully electric cars although it is so far unclear which models will be eligible for £1.500 or £3,750 off their respective price tags. It will be dependent on a complex sustainability criteria which is not entirely clear. Transport Secretary Heidi Alexander confirmed the Government's new scheme last month. The Electric Car Grant will offer between £1,500 and £3,750 off qualifying electric vehicles, depending on how sustainably they are made. However, it's not available yet, as carmakers must apply for approval — a process that could take weeks. The Volkswagen EVs that come under the firm's new £1,500 'Grant Guarantee' include the ID.3 in Pure, Pro and Pro trim levels, as well as the ID.4 in both Pro and Pure versions but excluding the GTX from both. The grant of £1,500 means the entry-level ID.3 Pure Essential's price drops to £29,360 while the ID.4 Pure Match is reduced to £38,090. Meanwhile, the Skoda's brands covered by the grant are the Elroq and Enyag, in SE, SE L, Edition and SportLine trim. The grant means the Elrog's price will start at £30,010 while the Enyag begins at £38,190. Volkswagen launch its new entry-level electric car, the Cupra's models covered by the grant is for the Born hatchback on V1, V2 and V3 trim levels, dropping the asking price to £34,190. The £1,500 'Grant Guarantee' for all three badges runs until August 31. Volkswagen, Skoda and Cupra all state the grant 'will honour the £1,500 grant on the vehicles specified, even if the government's grant is not awarded'. However, buyers won't be able to get both the 'Grant Guarantee' and the government's Electric Car Grant on any of the models, Auto Express reports. The move by the German car manufacturer follows similar deals or incentives from the likes of Hyundai, Alfa Romeo, Kia and Leapmotor. According to Auto Express, fewer than 50 new EV models would be eligible for the grant - provided they pass the necessary criteria. The scheme will also provide additional support for electric car purchases for Motability customers - as revealed in The Sun's recent report - offering substantial discounts. Find Your Next Car by What You Can Actually Afford Sun Motors has created the UK's First Finance-First Marketplace *Finance Powered by DSG Finance who are a Credit Broker Not A Lender. Representative 12.9%. Your rate may differ depending on individual circumstances You can check in less than 60 seconds if you are eligible for financing, and then search for your dream used car within your monthly budget. Here's how... Soft credit check , with no impact on your score , with no impact on your score 60-second decision , get a real finance decision in less than a minute , get a real finance decision in less than a minute Instant match , only see cars that fit your real budget , only see cars that fit your real budget AI-powered help, get tailored advice, suggestions, and instant answers from an AI advisor called Theo Find out what you can afford in just 60 seconds here. This has raised concerns among some critics, who argue that taxpayers may effectively be contributing twice - once through the Motability scheme and again through the EV grant subsidies. Furthermore, some welfare users have expressed difficulties with EVs, with issues such as limited home charging facilities and inadequate public charging infrastructure causing frustration for some. There are also several key points to keep in mind before you set out to choose your shiny new discontinued EV. Firstly, the scheme will not be immediately accessible - even though it officially launched on July 16. This is because car brands must apply for eligibility for the vehicles in their ranges, rather than buyers being able to register grants at the point of purchase. Also, not all grants will amount to £3,750 as the scheme adopts a two-tier system, with the value deducted from the recommended retail price (RRP) depending on how environmentally friendly the manufacturing process is for each model. According to the RAC, these restrictions encourage drivers to choose models that are not only cost-effective, but also more sustainable for the planet. Transport Minister Lilian Greenwood has warned that vehicles made in China may not be eligible. Speaking previously on the BBC's Today programme, she said factories powered by coal are unlikely to meet the Government's strict criteria. She added that only brands reaching minimum environmental standards will be approved for taxpayer support. 4 Skoda's Elroq will also see it's price slashed Credit: PR Handout
The Sun
13 hours ago
- The Sun
Three major car brands slash £1,500 off EV prices in huge boost for millions of Brits
THREE major car brands have slashed the price of some of its electric cars by £1,500, giving a boost to millions of Brits. The move by the Volkswagen Group includes brands from Volkswagen Skoda and Cupra and comes ahead of the Government's new EV scheme. 4 4 A new Electric Car Grant will see taxpayers foot the bill for EVs costing under £37,000, and only models from brands that have committed to a so-called Science-Based Target (SBT) for emissions. The grant worth £650million in total, which was announced by the government recently, will see prices slashed for some fully electric cars although it is so far unclear which models will be eligible for £1.500 or £3,750 off their respective price tags. It will be dependent on a complex sustainability criteria which is not entirely clear. Transport Secretary Heidi Alexander confirmed the Government's new scheme last month. The Electric Car Grant will offer between £1,500 and £3,750 off qualifying electric vehicles, depending on how sustainably they are made. However, it's not available yet, as carmakers must apply for approval — a process that could take weeks. The Volkswagen EVs that come under the firm's new £1,500 'Grant Guarantee' include the ID.3 in Pure, Pro and Pro trim levels, as well as the ID.4 in both Pro and Pure versions but excluding the GTX from both. The grant of £1,500 means the entry-level ID.3 Pure Essential's price drops to £29,360 while the ID.4 Pure Match is reduced to £38,090. Meanwhile, the Skoda's brands covered by the grant are the Elroq and Enyag, in SE, SE L, Edition and SportLine trim. The grant means the Elrog's price will start at £30,010 while the Enyag begins at £38,190. Cupra's models covered by the grant is for the Born hatchback on V1, V2 and V3 trim levels, dropping the asking price to £34,190. The £1,500 'Grant Guarantee' for all three badges runs until August 31. Volkswagen, Skoda and Cupra all state the grant 'will honour the £1,500 grant on the vehicles specified, even if the government's grant is not awarded'. However, buyers won't be able to get both the 'Grant Guarantee' and the government's Electric Car Grant on any of the models, Auto Express reports. The move by the German car manufacturer follows similar deals or incentives from the likes of Hyundai, Alfa Romeo, Kia and Leapmotor. According to Auto Express, fewer than 50 new EV models would be eligible for the grant - provided they pass the necessary criteria. The scheme will also provide additional support for electric car purchases for Motability customers - as revealed in The Sun's recent report - offering substantial discounts. This has raised concerns among some critics, who argue that taxpayers may effectively be contributing twice - once through the Motability scheme and again through the EV grant subsidies. Furthermore, some welfare users have expressed difficulties with EVs, with issues such as limited home charging facilities and inadequate public charging infrastructure causing frustration for some. There are also several key points to keep in mind before you set out to choose your shiny new discontinued EV. Firstly, the scheme will not be immediately accessible - even though it officially launched on July 16. This is because car brands must apply for eligibility for the vehicles in their ranges, rather than buyers being able to register grants at the point of purchase. Also, not all grants will amount to £3,750 as the scheme adopts a two-tier system, with the value deducted from the recommended retail price (RRP) depending on how environmentally friendly the manufacturing process is for each model. According to the RAC, these restrictions encourage drivers to choose models that are not only cost-effective, but also more sustainable for the planet. Transport Minister Lilian Greenwood has warned that vehicles made in China may not be eligible. Speaking previously on the BBC's Today programme, she said factories powered by coal are unlikely to meet the Government's strict criteria. She added that only brands reaching minimum environmental standards will be approved for taxpayer support. 4 4
