“We were doubtful about electrification, not anymore": Mercedes India MD

The company recently launched its fourth electric vehicle, the EQE, to woo the luxury EV segment.

Published On Sep 18, 2023 03:06:00 PM

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Santosh Iyer, CEO and MD (L) with Lance Bennett: VP- Sales & Marketing (R), Mercedes-Benz India

Mercedes-Benz, the country's largest luxury carmaker is on course to sell over 1,000 electric vehicles in 2023, accounting for almost 5 percent of its total sales in the current year. This would be over a 100 percent growth in sales for Mercedes EVs, albeit on a low base.

The market share of EVs in the luxury market is almost three times more than the mainstream market due to three main reasons: there is higher disposable income in this segment; cars offer more range; and the price difference between the ICE and EV version is less.

No doubts on electrification

The recently launched EQE too, costs just 10 percent more than its ICE variant. Santosh Iyer, MD of Mercedes-Benz India, had told Autocar India at the launch of the EQC almost three years ago that "there were multiple questions in the mind of the company about the future of electrification, but it is no more a question." He added that it was a fast-emerging reality all of us are embracing.

Iyer believes that the society has accepted EVs as the future and people want to buy an EV, but there are apprehensions on the shift. “The answer which I like and hate is that my next car will be an electric. I like it because I see a future where electric cars will come, but I wonder why they are not buying it today, when the options are available. This is what we are trying to address with EQE, where the pricing for the EV is more or less the same as its ICE equivalent in many states."

There are issues of range anxiety that Mercedes-Benz is addressing by boosting charging infrastructure; it is offering assured residual value and 10 years warranty – highest in the industry – to make it a hassle free experience for the consumers.

Mercedes Benz EV sales

Iyer says the adoption rate at the top end is definitely going to be much faster, yet Mercedes Benz is not running after volumes. "We have to be patient here, and not configure our product and strategy based on volumes. That would be a cardinal mistake as our customers are trendsetters; they show it to their family and peers. Hence, our cars have to be equipped with the best features and maximum range," explained Iyer.

In the first half of this calendar year, Mercedes-Benz sold about 450 electric vehicles, and the numbers could have been higher if not for the challenges in supply of the EQB. However, with a portfolio of four cars at different price points, Mercedes-Benz will be addressing a much wider customer base.

Luxury EV adoption

Mercedes-Benz aims for an all-electric line-up globally, post 2030. The adoption rate in India is likely to be slower, but it expects its market share to grow almost five times to 25 percent in the next three to four years.

To understand EVs better and also raise awareness on EVs, Mercedes-Benz has converted all its top executives’ cars to electric. Starting this month, top 30 officials' ICE cars will be replaced with a zero emission vehicle. To further help accelerate the adoption of electric vehicles in the country,Mercedes-Benz has also opened up its 140 fast charger stations across the country for non-Mercedes electric vehicles.

Iyer believes in India and says that ICE powertrains will continue to play a pivotal role. "We are not in a hurry because we want the customers to have all the options. We have petrol, gasoline, we have clean diesel, we have electric and we are building our entire portfolio. Our job is to give customers the option and educate them, and the market will slowly transform," he added.

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