Govt. incentives key for EVs until scale effect sets in, Mercedes-Benz India CEO

India is the first market outside the U.S. to start the local production of the EQS SUV 580
| Photo Credit: Arrangement

For German luxury car maker Mercedes-BenzTelangana is an important market contributing to 9% of its sales in India in 2023 with potential to grow at an accelerated pace, particularly if the State government has a relook on last year’s decision to levy road tax on electric cars.

Telangana has emerged as quite a big market for the carmaker and in 2024 expected to grow in double digits similar to India sales, Mercedes-Benz India Managing Director and CEO Santosh Iyer said in an interaction in Hyderabad on Friday ahead of the launch of the carmaker’s Made in India BEV — EQS SUV 580.

The State was one of the highest when it came to EV adoption for the company until it decided to introduce road tax on electric cars in the second half of 2023. The change led to share of electric cars in Mercedes-Benz sales in Telangana rolling back to 3% to 4% from about 10%. “This year we are now at 5% to 6% [electric car] penetration,” he said.

The rate of road tax on electric cars in Karnataka is 10% + 1.10% cess; nil in Tamil Nadu; Kerala – 5%; Andhra Pradesh -18%; and Telangana – 17%, according to the company.

“Hope they will introduce the incentives back as with growth of cities decarbonisation is one of the pre-requisite… incentives are not forever. We are requesting all governments to look at it pragmatically and keep the green transition on the agenda because EV is the only solution. Need to be supported till scale effect kicks in,” he replied to queries.

Mercedes Benz, which has invested Rs.3,000 crore on its production facility spread over 100 acres in Chakan near Pune, sold more than 17,400 units in 2023 and expects a double digit growth in 2024. MB India retails 24 models in the country of which 11 are made in India. These 11 models – 9 ICE and 2 BEV — comprise 95% of MBI’s total sales in India.

The EQS SUV 580 4MATIC is Mercedes-Benz’s 2nd BEV ‘made in India, for India’ after the EQS sedan. “The EQS SUV marks a significant milestone in our electrification journey in India, as the second locally manufactured luxury BEV from Mercedes-Benz and the third luxury BEV launched this year,” he said in a release.