Škoda Volkswagen to set up ₹15k cr Pune EV plant: Maharashtra deputy CM

Škoda Auto Volkswagen has received approval to set up a manufacturing facility worth ₹15,000 crore in Pune, Maharashtra deputy CM Devendra Fadnavis said in a post on X. Maharashtra's cabinet sub-committee on industries, led by Chief Minister Eknath Shinde, approved four projects on Thursday, including this facility.

The facility set to be established by Skoda Volkswagen in Chakan, Pune, will be used to manufacture electric vehicles (EVs) and hybrid cars, says  Fadnavis.

"This investment is aimed at further enhancing the Group’s product portfolio in the best interests of Indian customers, with a focus on more sustainable mobility solutions. These include, among other things, battery electric vehicles (BEVs) and the next generation of improved internal combustion engine (ICE) vehicles, upgrades to manufacturing facilities, and the creation of additional direct and indirect jobs, fostering sustainable growth in the region," said Škoda Auto Volkswagen India in its official statement.

The company says that it will share more details on the agreement at a later date.

The details of the approval were also shared by Fadnavis in a post on the social media platform X.

The Pune manufacturing facility is expected to generate over 1,000 employment opportunities, says Maharashtra deputy CM.

The sub-committee on industries, chaired by Maharashtra Chief Minister Eknath Shinde, included cabinet members such as Deputy Chief Minister Devendra Fadnavis, who was present, and Minister of Industries Uday Samant, who participated virtually.

Volkswagen Group India in October 2019 announced the merger of three of its subsidiaries in India to form Škoda Auto Volkswagen India Private Limited (SAVWIPL). SAVWIPL currently already has manufacturing units in Pune and Aurangabad.

The Pune plant has a production capacity of 1.8 lakh cars annually, while that at Chhatrapati Sambhaji Nagar (formerly known as Aurangabad) is capable of manufacturing 60,000 cars annually. The company recorded a cumulative sale of 145,713 units in the last financial year 2023-24, of which domestic sales stood at 101,465 units, while exports stood at 44,248 units, seeing a 32% yearly growth.

This EV facility is one of the four projects approved by the state which also include a semiconductor manufacturing facility, another electric vehicle (EV) manufacturing project, and a textile plant, which are collectively expected to create around 29,000 jobs. These four major investment initiatives, worth ₹1.20 lakh crore were greenlit on Thursday.

In July earlier this year, the state had also signed a memorandum of understanding with Toyota Kirloskar for setting up another EV facility in Aurangabad which will generate approximately employment for over 8800 people. The cabinet gave approval to this facility as well. Toyota Kirloskar will invest ₹21,273 crore to produce a range of hybrid and electric vehicles, including plug-in hybrids, fuel cell EVs, and battery electric vehicles in this plant.

Additionally, Raymond Luxury Cottons will reportedly invest ₹188 crore to establish a textile plant in Amravati, focusing on spinning, yarn dyeing, and weaving jute and cotton.

The semiconductor manufacturing plant by Israel’s Tower Semiconductor and the Adani Group in Panvel, Raigad district, is the most notable of these approved projects. It is the second time a semiconductor unit has been announced at the state level before receiving central clearance. This announcement is a significant boost for the Maharashtra government, particularly following the setback with Vedanta-Foxconn. In September 2022, Vedanta and Foxconn cancelled their ₹1.54 lakh crore investment in a semiconductor plant near Pune, opting instead to sign an MoU with the Gujarat government. However, that partnership ultimately fell through in 2023 when Foxconn withdrew from the joint venture, halting plans for the $19.5 billion plant.

With a total investment of ₹84,947 crore (approximately $10.12 billion), the project is set to create over 5,000 jobs and will focus on producing analogue and mixed-signal integrated circuits. The facility will initially have a capacity of 40,000 wafers per month, expanding to 80,000 wafers per month in the second phase.

The establishment of the semiconductor unit, however, is contingent on approval from the Ministry of Electronics and IT, as the Centre plans to revise its semiconductor incentive policy.