Volkswagen said on Thursday that it plans to start selling the ID.4 electric SUV in India next year but in limited quantities. India is currently promoting the development of the clean energy vehicle industry. Volkswagen will begin testing the technical performance of the ID.4 around September this year to determine whether it needs to be based on local weather conditions and environmental conditions, Ashish Gupta, brand director of Volkswagen India’s passenger car division, said in an interview on Thursday.
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Once the tests are over, the company will launch a limited number of electric vehicles in the Indian market next year, he said. Gupta said that since the Indian government only allows automakers to import 2,500 vehicles into the Indian market without obtaining certification, Volkswagen is bringing a limited number of electric vehicles to India just to test the waters of the market.
Although VW hopes to put all 2,500 electric vehicles on the market, vehicle supply is a big problem globally due to mounting supply chain problems, he said. Gupta said VW expects to start assembling electric vehicles locally in India around 2025 or 2027. By then, he said, Volkswagen would consider producing its own EV batteries, the most expensive component of EVs, in India.
India is the world’s fourth-largest auto market, and global automakers have seen a surge in interest in the local clean-energy vehicle industry. Volkswagen’s electric car will compete with a number of automakers when it enters the Indian market. Among them, Honda has launched its first hybrid sedan in India, priced at 1.95 million rupees, or about $25,000.
Toyota has agreed to adapt its hydrogen fuel cell Mirai to suit local road and weather conditions. Kia is also planning to launch its first electric vehicle in India later this year, while Hyundai has pledged to launch six battery-powered models in the Indian market by 2028, and plans to launch its first electric SUV, the Ioniq 5, locally this year.
While Volkswagen has raised prices twice to offset the impact of inflation, higher commodity prices have had a big impact on the company’s profit margins, Gupta said. Unable to continue to absorb soaring input costs, VW will further increase car prices, he said. Gupta said Volkswagen’s input costs have increased by an average of 10% to 12% this year.
For many automakers, including Volkswagen, the global situation has affected the supply of many parts, such as nickel used to make high-strength steel for cars, Gupta said. Volkswagen is working hard to increase the capacity of existing suppliers and form an alternative supply chain. He also said VW is introducing new models to address a shortage of infotainment and display systems.
Gupta believes that supply chain constraints and chip shortages will continue for at least six months. Tight supplies have led to longer delivery times for many of VW’s vehicles in the Indian market. He said the current waiting period for the compact SUV Tiguan is two months, and the delivery period for some high-end versions is even six months.
