Mahindra, Volkswagen set to form joint venture for EVs

Mahindra & Mahindra (M&M) and Skoda Auto Volkswagen India (SAVWIPL), a subsidiary of the Volkswagen Group, are reportedly finalizing a 50:50 joint venture to share costs, technology, and vehicle platforms for future product development. This partnership will primarily focus on developing battery-powered SUVs for both Indian and international markets, though it will also include fossil fuel-based models. According to The Economic Times, an official announcement is expected by the end of the year.

The collaboration will exclude current models sold by Volkswagen and Skoda, as well as luxury brands Audi and Porsche under the Volkswagen Group. Production of the new models will take place at SAVWIPL and Mahindra’s facilities in Chakan near Pune.

The partnership aims to share costs and risks while leveraging the local partner’s sourcing, engineering, and expertise. Discussions for this agreement have involved several rounds of both virtual and in-person meetings.

The relationship between the Volkswagen Group and Mahindra began with a supply agreement for Volkswagen’s MEB platform components for Mahindra’s electric platform, INGLO, finalized in February 2024. Skoda has identified India as its second-most important market outside Europe, following a slower approach in China and its exit from Russia. Mahindra, currently offering one EV model (XUV4OO), plans to launch seven new electric models by 2030.

For the Volkswagen Group, this joint venture represents a move to strengthen its position in the Indian auto market, where it has struggled despite a long presence. The group, including Skoda, Volkswagen, Porsche, and Audi, sold 88,412 units in FY24, a 9% decline from the previous year, reducing its market share to 2.24%.

This is not Mahindra’s first attempt at a joint venture with a global automaker. A planned partnership with Ford Motor Co. was called off in January 2021, and a previous collaboration with Renault ended in 2010.