More Indian Buyers Opting for EVs as First Luxury Car: Mercedes-Benz

Mercedes-Benz is seeing a rise in the number of Indian buyers opting for electric vehicles as their first luxury car, the country's managing director told Reuters, a trend that is helping the German carmaker boost their sales. Sales of luxury cars in India are surging helping market leader Mercedes post record numbers. In the first six months of 2024 Mercedes sold 9,300 cars in India of which 5% were electric models - doubling its EV penetration from 2.5% last year.

A growing clutch of young Mercedes buyers are turning to EVs for "differentiation", Santosh Iyer said after the launch of the EQS 580 SUV, a 7-seater electric model priced at around $168,200.

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

About 15% of all EVs sold by Mercedes in India this year were to first-time luxury car buyers, up from 5% in 2023, helped by new electric SUV launches, Iyer said. India's EV market is small but growing. Electric models made up about 2% of the total 4.2 million cars sold in India last year and the government wants to grow this to 30% by 2030.

Mercedes, which in January announced a new investment of $24 million in India, sells 18 combustion engine car models in India and six EVs. In 2022, the German carmaker began assembling EVs in India instead of importing fully-built units that attract duties as high as 100%. The EQS SUV is its second locally-assembled EV.

"We are taking the (EV) transition seriously, and pushing it hard by not only importing products but also localising more and more," he said. The high price of EVs compared with gasoline cars and uncertainty over its resale value are still a deterrent for many buyers.