Skoda Auto Eyes India for EV Expansion Amid Volkswagen’s Tax Dispute
Czech carmaker Skoda Auto is gearing up to manufacture electric vehicles in India, with plans to invest independently if its search for a local partner proves unsuccessful. CEO Klaus Zellmer emphasized India’s strategic importance, highlighting its potential as a key market for expansion beyond Europe. Skoda has already signed an initial agreement with the Maharashtra government for a $1.7 billion investment in EV production and is exploring joint ventures with companies that have “local roots.”
Meanwhile, Skoda’s parent company, Volkswagen Group, is facing a $1.4 billion tax dispute in India, accused of misclassifying imports to evade higher duties. If the company loses, penalties and interest could push the total amount to $2.8 billion, posing a significant financial challenge. While Zellmer refrained from commenting on the legal battle, he reiterated Skoda’s commitment to the Indian market, emphasizing its access to Volkswagen’s advanced EV technology.
Despite a modest 2% market share in India, Skoda remains optimistic, particularly as stricter fuel efficiency standards take effect in 2027. The company believes its cost-efficient EV solutions could give it a competitive edge in a market dominated by Suzuki and Hyundai. With China no longer a major market for Skoda and its exit from Russia, India has become a crucial growth driver and a gateway to Southeast Asia and the Middle East.
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