Skoda has officially announced its plans to introduce a budget-friendly electric vehicle (EV) in India, aligning with the rising demand for EVs. The new electric car is anticipated to be similar in size to the Kushaq SUV and will be manufactured at Skoda’s Aurangabad plant.

However, Skoda is cautious about moving too fast with this EV project.

It monitors policy updates, especially around the upcoming CAFE 3 norms and the government’s stance on EV and hybrid taxation, before giving the green light to production. 

Importance of Localization for Cost-Effectiveness

Skoda emphasizes that competitive pricing for its budget EV will be achievable only through extensive localization.

By focusing on localized production, Skoda aims to keep costs manageable, making the EV more accessible to a broader market segment.

However, the automaker has stated that for localization efforts to be truly beneficial, the Indian EV market needs to grow substantially from its current scale.

Skoda aims to localize deeply, ensuring that its EV can cater to budget-conscious consumers without compromising on quality.

India as a Priority Market for Skoda

India is one of Skoda’s top markets globally, and the company is not willing to take unnecessary risks.

Instead, it plans to wait and observe how the EV market evolves, allowing other automakers to establish a strong demand base for electric vehicles.

Skoda remains confident that a later entry won’t be a disadvantage, as the brand believes its products’ value will be competitive enough to capture significant market share even as a late entrant. 

Initial Offerings: Enyaq and Elroq SUVs

While Skoda’s budget EV is expected post-2027, the brand will initially venture into the EV segment with two premium offerings – the Enyaq EV and the Elroq SUVs.

The Enyaq, scheduled for a facelift by March 2025, and the recently unveiled Elroq, will be imported initially via the Completely Built Unit (CBU) route.

However, if demand justifies it, Skoda may consider local assembly for these models. These premium models will serve as Skoda’s entry point into the EV market, allowing the company to gauge interest and demand before launching the budget-friendly EV.

Market Trends and Future Outlook

The anticipated Kushaq-sized EV aligns with market trends, as India’s consumer preference shifts toward larger vehicles.

By the time Skoda’s budget EV is launched, the Kushaq lineup will likely feature both two-row and three-row options, positioning Skoda well to develop an electric SUV with broad appeal.

Skoda will join a competitive landscape, with established players like Maruti Suzuki, Tata, Mahindra, Toyota, MG, Honda, Hyundai, and Kia expected to compete in the mid-sized EV market.