Car companies must not give up on the transition to cleaner mobility, even if profit margins on combustion engine luxury cars are higher compared to electric vehicles, Santosh Iyer, CEO and Managing Director of Mercedes-Benz India said at Invest Karnataka 2025, on February 12.
"For luxury cars, margins are much higher for combustion engine vehicles compared to EVs, but that cannot be an excuse to delay the transition," Iyer said. He also mentioned that Mercedes-Benz India was among the first to introduce and localize EVs in India, and remains committed to sustainable mobility.
German luxury carmaker Mercedes-Benz’s Indian unit had launched its most affordable electric vehicle (EV) - the EQA - in 2024, priced at Rs 66 lakh.
The EV launch comes on the back of strong demand for luxury EVs, with the company seeing its EV sales grow by 60 percent in the first half of 2024, best figures for any luxury car company in India.
Read More: We need a UPI moment for EV charging ecosystem: Mercedes Benz India MD & CEO
From ‘Why EVs’ to ‘Which EVs’
India's EV landscape has transformed dramatically in the last two years, shifting from skepticism to a more informed consumer base choose from available models.
"India has moved from 'why EVs' to 'which EVs,' with so many OEMs participating. This shift has happened in the last 24 months, and the overall narrative is changing," Iyer said. However, affordability and infrastructure challenges still are barriers to mass adoption.
"Consumers are not yet ready to pay a premium for sustainable solutions. Even a 1% price increase makes it harder to push sustainable options," he said, adding that issues such as 'charger anxiety' continue to affect EV adoption.
Public Transport Electrification
Beyond private vehicles, Iyer stressed on the need for 'decarbonizing public transport' as a national priority. "It can be in the form of metros and buses," he said, highlighting the need for government and industry collaboration to scale sustainable mobility solutions.
Two-Wheelers: A Different Story
While luxury car buyers weigh multiple factors beyond total cost of ownership (TCO), the two-wheeler segment is seeing rapid EV adoption, primarily because of cost benefits.
Aravind Mani, co-founder of Bengaluru-based EV maker River EV, said that operational savings are driving this consumer behaviour.
"The cost of operating an EV two-wheeler is 1/10th that of a petrol scooter. Consumer behaviour and sheer economics are driving adoption in this space," Mani said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
