Volkswagen, JSW back at the table for EV venture as M&M deal stalls

Earlier in February 2024, Volkswagen and JSW Group were in talks to form a joint venture for EV manufacturing in India. The discussions have now resumed after VW's stalled pact with M&M

German carmaker Volkswagen has revived discussions with JSW Group, led by Sajjan Jindal, for a potential joint venture in India, according to a report by The Economic Times.

 

The move comes as Volkswagen’s earlier alliance talks with Mahindra & Mahindra (M&M) have reportedly stalled. The company has held several meetings with JSW in the past month to explore a partnership focused on manufacturing and mobility solutions.

Why it matters

 

A joint venture with JSW Group would mark a significant step forward for the automobile maker in the world's third-largest auto market, where it has been a marginal player, despite having a presence that spans over two decades. Experts have credited this to its high cost structure, along with tough competition from domestic, Japanese, and South Korean manufacturers.

 

In an email response to The Economic Times, Volkswagen said it is 'continuously assessing new business opportunities to tap India’s growth potential' and remains committed to offering innovative mobility solutions for the evolving market.

Proposed Volkswagen-JSW structure

 

The discussions are still at an early stage, with the commercial structure yet to be finalised. Under the proposed model:

 

• JSW Auto, the group’s mobility division, would manage local operations.
• Volkswagen would provide technology and product platforms.
• The partnership could also draw on SAIC Motor’s expertise, the Chinese parent company of MG Motor India, which already has a JV with JSW.
• If finalised, the tie-up could create one of India’s most comprehensive EV ecosystems, combining JSW’s domestic manufacturing and distribution network with Volkswagen’s global automotive technology.

Volkswagen’s stalled Mahindra deal

 

In 2024, Volkswagen Group and Mahindra & Mahindra were in advanced talks to form a 50:50 electric vehicle partnership. However, negotiations stalled later in the year after both automakers failed to agree on key commercial and operational terms despite signing non-binding memorandums of understanding (MoUs).

 

Industry experts noted that the breakdown reflected differences in technology-sharing, cost structure, and production scale expectations.

Previous Volkswagen–JSW engagement

 

This is not the first time Volkswagen and JSW have explored collaboration. In February 2024, the groups held initial discussions to establish an EV joint venture in India.

 

That followed JSW Group’s ₹40,000-crore agreement with the Odisha government to set up an integrated EV and battery manufacturing complex across Cuttack and Paradip. The project aimed to position JSW as a long-term EV player, leveraging both domestic and international partnerships.

India’s evolving EV landscape

 

India’s EV market is projected to grow at a compound annual rate of 49 per cent through 2030, with automakers competing to capture demand in both passenger and commercial vehicle segments.

 

Volkswagen’s potential collaboration with JSW could help it leverage local expertise and cost efficiencies, aligning with the government’s Make in India and green mobility initiatives.