German luxury carmaker Mercedes-Benz is contemplating expanding its electric vehicle (EV) assembly operations in India, aiming to align with its global goals of zero-emission mobility and carbon neutrality. This strategic move, as detailed by a senior company official, goes beyond mere cost advantages and focuses on sustainable production and market responsiveness.
Current and Future Assembly Plans
Mercedes-Benz India currently assembles its flagship electric luxury sedan, the EQS, at its Chakan plant. The company is now considering the localization of additional models based on market demand. Santosh Iyer, Managing Director & CEO of Mercedes-Benz India, emphasized the holistic approach towards achieving zero-emission mobility, covering aspects from tailpipe emissions to the recyclability of the cars and the overall carbon footprint generated during production.
“Our final goal is zero-emission mobility and a carbon-neutral setup,” Iyer stated. “Producing EVs is a logical step, and we will continue in that direction as market demand evolves.”
Cost and Knowledge Benefits
Since October 2022, Mercedes-Benz India has been assembling the EQS at the Chakan plant. This model is currently the only locally assembled EV among the four electric models sold in India, including the EQA, EQB, and EQE SUVs, and the EQS sedan, with prices ranging from Rs 66 lakh to Rs 1.6 crore.
Local assembly provides significant cost advantages. “Localisation helps us bring certain cost advantages. An EQS, for example, is available at around Rs 1.5 crore, which would otherwise be more expensive,” Iyer explained. Beyond cost savings, local assembly enhances the company’s knowledge and expertise in EV production, facilitating a smoother transition from combustion engines to electric vehicles.
Global and Local Emission Targets
Globally, Mercedes-Benz aims to achieve net carbon neutrality for its entire fleet of new vehicles by 2039, covering the entire value chain and the vehicles’ life cycle. The company plans to run its production plants worldwide on 100% renewable energy with zero CO2 emissions by the same year. Under its Ambition 2039 initiative, Mercedes-Benz also aims to reduce CO2 emissions per passenger car in the new vehicle fleet by up to 50% by the end of this decade, compared to 2020 levels.
Market Monitoring and Future Surprises
Iyer mentioned that while the company is open to assembling more EVs in India, it depends on market demand and achieving threshold volumes. “We are closely monitoring the market and will not shy away from any investments if required,” he said. When asked about the next EV model to be localized in India, Iyer hinted at future surprises similar to the EQS.
Record Sales and Growing EV Market
Mercedes-Benz India reported a 9% growth in sales, reaching 9,262 units in the first half of 2024, marking its highest-ever half-yearly sales in the country. EVs accounted for over 5% of total sales volumes, with EV sales growing by 60% compared to the same period last year.
As Mercedes-Benz continues to adapt and innovate in the Indian market, the potential expansion of EV assembly operations signifies a significant step towards sustainable and cost-effective luxury mobility.
