Mercedes India prioritizes Electric cars over Hybrids, says its CEO [Update]

AutocarIndia.com had reported last month that Mercedes-Benz India is more focused on battery electric vehicles, rather than hybrid (soft hybrids and plug-in hybrids) vehicles. The carmaker feels India’s taxation is punitive towards hybrid vehicles, especially those that are imported.

Currently, the GST on hybrid vehicles, despite them offering low CO2 emissions and even limited range of pure electric drive capability, is 43 per cent (28 per cent GST plus 15 per cent cess) whereas the GST on electric vehicles is a mere 5 per cent. Moreover, many states have waived road taxes on electric vehicles, and Martin Schwenk, MD and CEO of Mercedes Benz India, believes the adoption of Mercedes electric cars will come through such incentives.

Speaking about plug-in hybrids, Schwenk said the company may not see a wide adoption as there’s no policy support on import duties and consumer taxes currently. The executive said that the company would push into the battery electric vehicle segment first.

CNBCTV18.com asked Schwenk this month if the Coronavirus pandemic would slow the growth of electric vehicles in the Indian market, to which the German executive said:

I wouldn’t personally expect that. The government has set out clear policies that favour the electrification of the portfolio and as long as these strategies remain in place and they are making specific references to the GST rate and reduced road taxes that customers need to pay that would be on the hand the commercial enabler but on the other hand I can see the entire society is getting more aware of pollution and of the question of sustainability of product and lifestyle. Customers nowadays, quite a few of them are traditional Mercedes customers but there is also customers from other brackets who say yes we want to be conscious of the environment and we want to live in a more sustainable way and I think the crisis itself triggered for many people the thought of how do we live between humans and the planet and there you will get questions of sustainable lifestyle and that would certainly over time create a market for electric vehicles.

Martin Schwenk, MD & CEO of Mercedes Benz India

The Mercedes EQC, the company’s first electric vehicle, was launched in India last month at INR 99.3 lakhs, ex-Showroom. The fully-imported Mercedes electric car features a range of 471 km (WLTP cycle), and AWD capability with 408 PS and 765 Nm. 0-100 km/h comes up in 5.1 seconds and the top speed is limited to 180 km/h.

The Mercedes electric car can be charged at over 100 locations across 48 cities in India, and the company will also install a 7.4 kW AC wall box charger at the customer’s home. Globally sales of the Mercedes EQC observed an upward trend in September and the company is working on a 11 kW charger for the EQC to reduce charging duration which could be launched in India next year.

Going forward, globally, Mercedes will unveil its luxury electric car, the EQS, in 2021. During the launch of the Mercedes EQC in India, a teaser video of the Mercedes EQS (under camouflage of course) was played, hinting that the EQS was under consideration for the country. Further, Mercedes has confirmed a EQS SUV, which could be an ideal fit for a Mercedes flagship in India which prefers the SUV bodystyle in the INR 1 crore+ market especially.

On the other end of the spectrum, the Mercedes EQA, the entry level Mercedes electric car, will enter production in Germany later this year, though its Indian launch has not been confirmed. However, given the influx of electric vehicles in the INR 40-55 lakhs range (the Volvo XC40 Recharge launches next year, and Tesla has announced its Indian entry for 2021 and is expected to launch the Model 3 at that price range), Mercedes could consider introducing accessible electric vehicles to increase the adoption of EVs.

With more adopters for electric cars, the company could consider local assembly through the CKD route (where the import duty drops from 100 per cent of CBU to 15 or 30 per cent). However, Schwenk confirmed that the carmaker will not be assembling the Mercedes EQC in India, but that option is left open for the Mercedes EQA or EQB.