Mercedes-Benz has to go ‘both ways’ for 6-8 years: India CEO Martin Schwenk

Almost all luxury carmakers have launched their versions of electric vehicles in a bid to catch the turning tide of mobility as the era of internal combustion engines that rely on petrol or diesel nears the tipping point of declining sales.

However, with over 95 percent of the cars sold in India still running on petrol and diesel, all EV launches here are effectively exercises in brand building and aspiration creation, unless they are made by mass-market manufacturers such as Tata Motors (Nexon) and others.

BMW, Audi, Porsche and even middling car companies such as Kia have launched and showcased their EVs with one common underlying factor: They are all expensive and mostly sold in very small volumes.

So what makes Mercedes-Benz’s latest launches, the Mercedes-AMG EQS 53 and the soon-to-be locally made EQS, so different from its own EVs?

“Both models are made on completely newly designed platforms, which are scalable but dedicated electric architectures. That is different to models built before,” said Martin Schwenk, CEO of Mercedes-Benz India. “So this is really unique and solely optimised for electric cars. We call it Eva 2 because that's its own architecture for electric vehicles.”

For Mercedes-Benz, it’s important to not only launch these cars, but also to produce them locally because that is the future, he said.

Building locally

“We start going into this future concept of electric vehicles’ architecture and we then bring them here to India by not only importing, but also building them here,” Schwenk said.

The Mercedes-AMG EQS 53 4MATIC+, priced at about Rs 2.5 crore, is a CBU (completely built unit) developed on the company’s latest all-electric platform and was launched in India on August 24.

India has two models confirmed on the platform so far. Globally, by 2025, there will be 15 electric vehicles on a mix of platforms of which relevant models will be launched in India as well. One of them will include the EQB later, he said.

There is a key difference between the new Eva 2 EV architecture and the older electric cars made by Mercedes-Benz.

“The EQC is a derivative which was based on a GLC, an older platform that was not dedicated for electric. It was adapted for electric out of an existing engine. And by body shape, it’s a coupe-style SUV. The EQS now is a fully fledged sedan built on a dedicated electric architecture,” Schwenk said.

With Kia and other car companies roping in top-notch designers globally, the EV race is still a level-playing field in some sense, which means the onus lies on Mercedes-Benz to establish itself as “the Louis Vuitton of electric cars.”

“So, this is clearly the defined strategy for Mercedes-Benz: that we foster our top luxury segment. We have, over the years, consistently grown. At the same time, we’re not abandoning the entry luxury segment… But, of course, the aim is to support and to go into the higher, even more profitable and more technology-driven segments and to establish the brand even stronger than it is today as a luxury brand,” Schwenk said.

According to Suraj Ghosh, director of mobility at S&P Global, while Mercedes-Benz has historically been seen as the bellwether of luxury engineering in the auto space, the emergence of companies such as Tesla in the past five years has somewhat challenged its overarching dominance.

“Mercedes-Benz’s upcoming slew of electric cars will be nothing short of demonstrating how they remain the elite engineering and luxury player, regardless of what powers their car,” Ghosh said.

Schwenk said that with the new strategy and models in the pipeline, it expects electric vehicles to account for about 25 percent of its sales volumes in the next five years.

“But again, this is our prognosis... by the end of the decade, the vast majority of our cars, or the significant majority of our cars, will be electric only. So that's what we are preparing for,” he said.

Industry firsts

The car that Schenk launched showcased the new MBUX Hyperscreen, which is described as the ‘heart and brain’ of the vehicle because of its computer-like functionality and other industry-first features, including a 10-year battery warranty and service requirement only every two years.

There’s also a strong focus on ESG-compliance with recycled materials comprising at least 80 kg of the material used in the car, including recycled fishnets and plastics.

Schwenk says it has mapped major travel routes in India with 140-plus fast-charging networks across more than 100 outlets, which will allow drivers to cover cities with ease.

So does the new EV rollout mean that petrol and diesel cars will take a backseat?

“No, we still have big things coming next year. So again, it will take a few years until we get to the tipping point. We are right now in a moment of transition… we keep our strategy of petrol and we have our efficient diesel engines. We will even launch new cars because we think we have to go both ways for the next six or eight years,” Schwenk said, adding that the inflection point for EV adoption could turn sharply very soon.