Volkswagen, Mercedes interested in manufacturing locally under new

Volkswagen and Mercedes-Benz have expressed interest in manufacturing electric vehicles (EVs) locally in India, leveraging the favorable terms under the recently announced EV policy, according to a senior government official. The policy, introduced on March 15, offers significant import duty concessions to companies that commit to substantial investments and local production.

The new policy is designed to attract global automotive giants by offering lower tariffs and incentivizing local manufacturing. Companies that invest at least $500 million (approximately Rs 4,150 crore) and establish manufacturing facilities within three years, with a minimum of 25 percent of components sourced locally, can benefit from these concessions.

A senior government official stated, "Some foreign companies that are already in India, such as Volkswagen and Mercedes, have shown interest. They are looking to take advantage of the EV policy to manufacture locally." However, both automakers have yet to make a final decision.

Volkswagen and Mercedes-Benz have already established a significant presence in India. Mercedes-Benz, for instance, has invested over Rs 3,000 crore in Pune, where it operates an EV assembly line. Volkswagen, on the other hand, is reportedly planning to assemble its first electric vehicle for India, the ID.4, at its Aurangabad plant, with a potential launch slated for 2024.

Despite their interest, both companies remain tight-lipped about their future plans. Škoda Auto Volkswagen India Private Limited declined to comment on the matter, while a Mercedes-Benz India spokesperson stated that they do not "comment on speculations."

The EV policy represents a strategic move by India to become a global hub for electric vehicle manufacturing, attracting leading automakers to invest and produce locally. If Volkswagen and Mercedes-Benz move forward with their plans, it could mark a significant milestone in the country's journey toward sustainable mobility.