German luxury carmaker Mercedes-Benz is contemplating the assembly of more electric vehicles at its Indian plant, not only to achieve cost savings but also to fulfill its goals of zero-emission mobility and a carbon-neutral setup, according to a senior company official.
Mercedes-Benz India, which currently assembles its flagship electric luxury sedan EQS at its Chakan facility, is evaluating the localization of other models based on market demand.
“Our final goal is zero emission mobility and carbon neutral setup, which not only means about tailpipe emissions, but also from the recyclability of the car, to the carbon footprint that we generate by producing these cars,” Mercedes-Benz India Managing Director & CEO Santosh Iyer told PTI.
He further said, “We have to look at this holistically and therefore producing EVs was the logical step and we will continue in that direction as the market demand changes.”
Iyer was responding to a question about Mercedes-Benz India’s long-term plans for local assembly of EVs in the country.
Since October 2022, Mercedes-Benz India has been assembling the EQS at the Chakan plant. This is the only model currently being assembled locally out of the four EV models sold in India—SUVs EQA, EQB, and EQE, and the EQS sedan. These models are priced between ₹66 lakh and ₹1.6 crore.
Acknowledging the benefits of local assembly, he said, “I think localisation helps us to bring certain cost advantages. Today if you see an EQS is available at around ₹1.5 crore, which otherwise would have been a bit more expensive. So that really helps us.”
Besides the cost advantage, Iyer said, “It also helps us to gain a lot of knowledge on EVs, because that’s a long-term setup. Today we are producing EVs in the same line as combustion engines. So we have a very flexible production plant where we are able to produce both. All these, I think are also necessary to build our knowledge level and build up as we do the transition that we have stated globally as well as in India.”
Mercedes-Benz has set a global target to achieve net carbon neutrality for its entire fleet of new vehicles across the entire value chain and throughout the vehicles’ entire life cycle by 2039. By the same year, the company also plans for its production plants worldwide to operate entirely on renewable energy, resulting in zero CO2 emissions.
Additionally, under its Ambition 2039 initiative, Mercedes-Benz aims to reduce CO2 emissions per passenger car in its new vehicle fleet by up to 50 percent across all stages of the value chain by the end of this decade, compared to 2020 levels.
When asked if the company is open to assembling more EVs in India, he said, “We are considering I would say but it is a factor of demand also in the market that we see because to localise you also need certain threshold volumes. We are closely monitoring and we will not shy away from any investments if required.”
On whether the company has identified a second EV model to be assembled in India, Iyer said, “At this stage, I can only say we’ll continue to surprise the market, as we did with the EQS, with more localised products in the future as well.”
Mercedes-Benz reported a 9 percent increase in sales, reaching 9,262 units in India during the first half of 2024, marking its highest ever half-yearly sales in the country. Electric vehicles (EVs) made up over 5 percent of the total sales volume, with EV sales growing by 60 percent in H1 2024 compared to the same period last year.
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