Key Highlights:
• Mercedes-Benz India to localize more EVs in India
• Mercedes-Benz aims to reduce carbon emissions by 50%
• Reported a 9% rise in sales, reaching 9,262 units in India during H1, 2024
• EVs made up 5 percent of the total sales volume, with 60% growth in H1, 2024
Mercedes-Benz, the German luxury car manufacturer, is considering increasing the assembly of electric vehicles at its plant in India. This move aims to reduce costs and align with its objectives of achieving zero-emission mobility and establishing a carbon-neutral operation, as stated by a senior company official. Mercedes-Benz India, which now assembles its top electric luxury sedan, the EQS, at its Chakan facility, is assessing the possibility of localizing other models depending on market demand.
Managing Director and CEO of Mercedes-Benz India, Santosh Iyer, stated that our ultimate objective is to achieve zero-emission mobility and a carbon-neutral operation. This encompasses not only tailpipe emissions but also the recyclability of the cars and the carbon footprint generated during their production. He further added, We need to consider this comprehensively, and thus, producing EVs was the logical step. We will continue in this direction as market demand evolves.
Iyer made these remarks in response to a query about Mercedes-Benz India’s long-term plans for local assembly of EVs. Since October 2022, Mercedes-Benz India has been assembling the EQS at its Chakan plant. This is currently the only model being locally assembled out of the four EV models available in the inventory: the EQA, EQB, and EQE SUVs and the EQS sedan. These models are priced between Rs 66.0 lakh and Rs 1.6 crore.
Acknowledging the benefits of localization, Iyer said, I believe localization provides us with certain cost advantages. Currently, the EQS is available for around Rs 1.5 crore, which would have been more expensive otherwise. So, this approach is really beneficial for us. It also enables us to gain valuable EV knowledge, vital for our long-term strategy. We produce EVs alongside combustion engines, demonstrating our flexible production.
This flexibility is crucial for developing expertise and supporting our global and Indian transition commitments. Moreover, through its Ambition 2039 initiative, Mercedes-Benz aims to cut carbon emissions per passenger in its new vehicle fleet by up to 50 percent across all stages of the value chain by the end of this decade globally, in comparison to 2020 levels. As per the reports, Mercedes-Benz is contemplating localizing more EVs in India, depending on market demand, as localization involves threshold volumes.
A detailed evaluation is in process, which will decide whether India is worth new investments related to EV localization or not. For now, there is no update on the second localized model in Mercedes-Benz India’s portfolio, yet the speculated model to undergo local assembly next is likely their new offering, the EQA 250+.
The Verdict:
Mercedes-Benz recorded a 9% rise in sales, reaching 9,262 units in India during the first half of 2024, achieving its highest-ever half-yearly sales in the country. Electric vehicles (EVs) accounted for over 5 percent of total sales, with EV sales growing by 60% compared to the same period last year. Localization has reduced prices, significantly boosting EV sales in India’s diverse market. With more localized products, Mercedes aims to surpass its competition and tap into the mid-range buyer segment, enhancing its market share and presence in India.
