On Monday, Mercedes-Benz released its second made-in-India electric car, the EQS SUV. This is owing to its long-term demand strategy despite issues like differential road tax in different states and overly-provided incentives that are restrictive to the EV market.
Mercedes-Benz Success with Local Assembly:
The new locally built EQS sedan was launched recently, and the company believes that similar to the response to the locally produced EQS sedan, there will be a positive response to the second made-in-India car, according to a Mint interview with Santosh Iyer, Managing Director and CEO of Mercedes-Benz India.
The recently introduced EQS SUV, rolled out from the company’s Chakan plant, puts India in a unique position as it assembles the German carmaker’s flagship EV outside the United States of America.
“We first localized our EQS sedan as the first locally manufactured electric vehicle in India,” said Iyer. “Casting aside the experience of other automotive companies, which took several years to shift considerable numbers of expensive cars, Rajiv says, ‘Within 18 months of its launch, we have sold more than 500 of this ₹1. 6 crore-plus EV.'”
Demand for the EQS SUV:
The newly launched EQS SUV has attracted orders for more than fifty units. It is branded and priced above ₹2. 25 crore. Earlier in the year, Iyer told the press, “We expect to be sold out for the year within the next couple of weeks, and it is touching the imprisonment mark of three digits.”
India’s EV Policy and Challenges:
However, these facts are promising. Some issues are related to the absence of an EV policy in India and other states. For example, the recent introduction of road taxes on EV’s in Delhi has caused shifts in purchasing behaviour.
“Few customers who own houses in Gurgaon and Noida are affected by different taxes in both places, said Iyer.” However, he stated that it is premature to quantify the degree of pollution the government sought to address through the reinvention of the road tax.
Optimism About India’s EV Future:
Although Iyer is upbeat about the long-term EV strategy in India, there is an argument that the government of India has been supportive of green energy. According to Siva, there is a push on the government front, and as good corporate citizens, we are bringing that many more car lines now. This is our sixth in India, and we are seeing growth from two percent to five percent last year, five percent electric vehicle pens, or EV penetration in the first half of this year.
He also pointed to India’s progress in transitioning to renewable energy sources: In India, 43% of the energy is generated from non-fossil sources, and hence, the government’s efforts to have a green-eyed transition assure that electric vehicles have a great future in the country.
Mercedes-Benz Strategy for Local Assembly:
Some of the factors that have guided Mercedes-Benz to shift its energy to local assembly include India’s high taxes on fully imported automobiles. Furthermore, the company’s flexible production lines at Chakan plant enable the firm to better meet market needs than rivals.
“Currently, at our Chakan plant, we are using a flexible manufacturing system for manufacturing both EV cars, hybrids, and other models on the same line, and this is advantageous since it can easily introduce new car lines that may be necessary,” added Iyer.
A Long-Term Commitment to India:
Iyer also stressed that his company has followed a highly consistent strategy in India, which may be best described as patient: Mercedes-Benz has been present in India for 30 years. “That is why we are industry leaders in the luxury segment: We take a sustainable approach and do not stop experimenting.”
