Mercedes-Benz Sees Surge in EV Adoption Among Luxury Car Buyers in India

According to the country’s managing director in an interview with Reuters, Mercedes-Benz’s Indian market has witnessed a notable uptick in the adoption of electric vehicles (EVs) as the first choice for luxury cars. This trend has contributed to the German automaker’s sales growth.

Record Sales and EV Penetration of Mercedes-Benz

The surge in luxury car sales in India has driven Mercedes to achieve record numbers, with the company selling 9,300 cars in the first half of 2024. Notably, 5% of these sales comprised electric models, marking a significant increase from the 2.5% electric vehicle penetration seen in the previous year.

Santosh Iyer, speaking after the launch of the EQS 580 SUV, a 7-seater electric model priced at approximately USD 168,200, noted that an increasing number of young Mercedes buyers are opting for EVs as a means of differentiation.

“Most of them are opinion leaders in their own small target groups, be it doctors, lawyers, or architects. So they want to show that they have first transitioned,” said Iyer, adding that this group is small but growing.

Mercedes sold approximately 15% of its electric vehicles (EVs) in this year to first-time luxury car buyers in India, showing a significant increase from 5% in 2023. This growth can be attributed to the introduction of new electric SUV models. Despite the relatively small size of India’s EV market, which accounted for about 2% of the 4.2 million cars sold last year, there is a clear upward trend. The Indian government has set ambitious targets, aiming for electric vehicles to represent 30% of all car sales by 2030.

Mercedes-Benz’s Commitment to the Indian EV Market

Mercedes demonstrated its commitment to the Indian market by announcing a new USD 24 million investment in January. Currently, the company offers 18 combustion engine car models and six electric vehicle models in India.

In 2022, the German automaker initiated local assembly of electric vehicles (EVs) in India to avoid high import duties of up to 100% on fully built units. The EQS SUV marks the company’s second locally assembled EV.

The company representative stated that they are fully committed to the EV transition and are aggressively pursuing localization efforts, moving beyond mere imports.

Despite the push for EV adoption, the high initial cost of EVs relative to traditional gasoline vehicles and uncertainties surrounding their resale value continue to dissuade potential buyers.