Mercedes-Benz to lead India’s luxury EV market

WITH European car sales slowing, Mercedes-Benz has this week announced it plans to lead India’s fledgling luxury EV market with the AMG EQS 53 model.

The announcement came as rival Tesla disclosed it would stay out of India concentrating its efforts on other markets.

The Mercedes-Benz plan is for an “aggressive three model offensive” targeting wealthy, potential EV buyers on the subcontinent.

As reported by Reuters, Mercedes-Benz’s intends to cement its title as the top-selling luxury car brand in India and keep ahead of Tesla… and other makes.

The premium German car-maker will be the first company to build a luxury EV in the country in addition to launching with a three electric car line up.

Mercedes-Benz India CEO Martin Schwenk said: “Mercedes-Benz will set up a fast-charging network nationwide and might also manufacture batteries domestically in the future.”

“Now, we are really starting our aggressive offensive into the EV market. In the next five years, 25 per cent of our sales (in India) will be electric. Our ambition is to lead the market in the electric side as well.”

Mercedes-Benz’s inroads come as EV rival Tesla recently put on hold plans to enter India due to several issues.

Tesla outlined its grievances in a recent Automotive News Europe (ANE) report that said: “Talks between India and Tesla over potential tax benefits are deadlocked as the government is not keen to give the company any breaks without a commitment to manufacture locally.”

Tesla said it was keen to import and sell its electric vehicles in India and has for nearly a year lobbied officials in New Delhi to reduce tariffs, which the company’s CEO, Elon Musk, says are among the highest in the world.

But according to ANE’s report, Indian official sources said they have been unconvinced by Tesla’s lobbying as the company has not yet shared any firm plan to invest in the country, something that would be in line with Prime Minister Narendra Modi’s “Make in India” vision to boost local manufacturing and create jobs.

Which opened the door for Mercedes-Benz’s push that began by launching this week an imported electric AMG EQS 53 4MATIC performance luxury car. It will be followed in quick succession by

a locally assembled Complete Knock Down (CKD kit) electric version of Benz’s flagship S-Class sedan, the EQS, and after that, an imported electric people mover later this year, ANE reported.

The AMG EQS has a driving range of 580km on a single charge and is priced at around $US307,000 ($A441,438) in India.

Luxury models make up one per cent of total annual Indian car sales of about three million vehicles which is mainly a small car and low-cost car market. But a rapidly growing middle and wealthy class may increase sales of luxury electric vehicles, a proposition that Mercedes-Benz bold plan is testing.

Mercedes-Benz already sells an imported EQC SUV into India and will be the first to assemble a luxury EV in the country.

ANE’s report says this will allow it to price the car competitively over rivals because of a lower tax rate of five per cent on locally built EVs compared to 100 per cent tax on imported models.

It will give Mercedes-Benz an edge in India over competitor German brands Audi and BMW regardless of what Tesla decides to do.

“That five per cent tax rate is quite an incentive for customers to go electric,” said Mr Schwenk.

Addressing any range anxiety relating to its EQS electric vehicles, Mercedes-Benz has given an undertaking to set up by the end of this year, 140 EV chargers nationwide including ultra-fast units that can replenish up to 80 per cent battery charge in 40 minutes .

“We will also consider locally manufacturing EV batteries and other components if sales dictate though current volumes were too small to justify such an investment,” added Mr Schwenk.

“You need a certain scale to make sense. I will not exclude that for the future but at this stage, it’s not part of the plan.”

Globally, Mercedes-Benz plans to invest more than $A57 billion by 2030 in EV battery development and production.

Mr Schwenk told ANE he expects India to align with the company’s plans of shifting to EVs in terms of speed and product launches.

“We will be in line with the global aspiration of converting to electrification because we believe we can be as fast, or sometimes maybe even faster, than some other markets,” he said.