Mercedes-Benz considers expanding EV assembly in India

German luxury carmaker Mercedes-Benz is evaluating the possibility of assembling more electric vehicles (EVs) at its plant in India. The move aims not only to achieve cost advantages but also to align with the company's goals of zero emission mobility and a carbon-neutral setup, as per a senior company official.

Mercedes-Benz India, which currently assembles its flagship electric luxury sedan EQS at its Chakan facility, is considering the localisation of other models based on market demand.

“Our ultimate goal is zero emission mobility and a carbon-neutral setup, which encompasses not just tailpipe emissions but also the recyclability of the car and the carbon footprint generated during production,” said Mercedes-Benz India Managing Director & CEO Santosh Iyer in an interview with PTI. “Producing EVs is a logical step, and we will continue in that direction as market demand evolves.”

Iyer's comments were in response to queries about Mercedes-Benz India's long-term plans for local EV assembly. The company began assembling the EQS at the Chakan plant in October 2022. This model is currently the only locally assembled EV out of the four models—SUVs EQA, EQB, and EQE, and the sedan EQS—that Mercedes-Benz sells in India, priced between Rs 66 lakh and Rs 1.6 crore.

Highlighting the benefits of local assembly, Iyer stated, “Localization helps us achieve certain cost advantages. For instance, the EQS is available at around Rs 1.5 crore, which would have been more expensive without local assembly. Additionally, local production helps us gain crucial knowledge about EVs, facilitating a smooth transition in both global and Indian markets.”

Globally, Mercedes-Benz aims to make its entire fleet of new vehicles net carbon-neutral by 2039, covering the entire value chain and the vehicles' life cycles. The company plans for its production plants worldwide to run entirely on renewable energy with zero CO2 emissions by the same deadline. Under the Ambition 2039 initiative, the company also seeks to reduce CO2 emissions per passenger car by 50% across all stages of the value chain by the end of this decade compared to 2020 levels.

When asked about the potential for assembling more EVs in India, Iyer responded, “We are considering it, but it depends on market demand as localization requires certain threshold volumes. We are closely monitoring and will not hesitate to invest if necessary.”

Regarding the identification of a second EV model for assembly in India, Iyer said, “We will continue to surprise the market with more localized products in the future, similar to what we did with the EQS.”

Mercedes-Benz reported a 9% growth in sales in India, 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 the total sales volume, with EV sales growing by 60% in H1 2024 compared to the same period last year.

(With PTI inputs)