Mercedes-Benz’s EV ramp-up could position India as manufacturing base

Greening operations

The drivers behind these goals are also related to environmental, social, and governance (ESG) norms.

“Electrification has come to the fore primarily as a measure to reduce the tailpipe carbon-dioxide (CO2) emission of vehicles,” said Suraj Ghosh, director of mobility at S&P Global. “The transition to EVs is an important step for automakers to be compliant with the strict CO2 regulations and also as a measure to achieve their own ESG goals.”

He said Mercedes-Benz has set itself serious targets for reducing CO2 emissions not only from car tailpipes but also its operations.

“The aggressive launch of EVs, though important, is only one of the many measures. Mercedes-Benz is ‘greening’ its entire supply chain, manufacturing and other associated operations with the objective of halving CO2 emissions per car,” Ghosh said.

Mercedes-Benz officials noted that the company has launched three new luxury EVs in India and estimates 25 percent of its annual sales in the country will comprise of luxury EVs in the next five years.

India is the first market outside Germany to locally produce the EQS 580 luxury SUV. This year, Mercedes-Benz India will have four luxury EVs: EQC, EQS 53 AMG, EQS 580, and, by the first week of December, the EQB will join this portfolio.

The ‘Made in India’ EQS 580 generated 300-plus confirmed bookings within the first two weeks of launch — high numbers for an EV that is priced at Rs 1.55 crore.

While those numbers are encouraging, what about the charging network?

Officials at Mercedes-Benz said the company will create the largest nationwide ‘ultra-fast’ changing network by a luxury carmaker that will cover 80 percent of the country by the end of 2022. Its network of 140 charging stations is exclusively for the company’s customers.

Though India’s luxury car market is relatively small in terms of size, the company’s decision to localise EV production is an indication of a larger global strategy.

Electric future

“It could be one where India could indeed be the production hub outside of Europe. Additionally, it gives it an edge over its peers,” Ghosh said.

The big question is whether customers will start moving away from the traditional internal combustion engine cars. They probably will have no choice.

“Mercedes-Benz has set the course for a fully electric future: By the end of the decade, the brand with the star will be ready to become fully electric — wherever market conditions allow,” Starzynski said.

What will not change is the objective.

“It’s still about building the best cars in the world and the strongest argument is a ride in an EQS… In the end, an electric Mercedes is a highly emotional vehicle in all its facets,” Starzynski noted.

He said there are challenges to any new car-making platform.

“An electric vehicle is quiet. Therefore, it is important to remain quiet also in the interior… The most valuable part of the vehicle is the battery when it comes to cost, resource preservation and weight. So we have put a lot of emphasis on efficiency, our new currency. You can see it on the design of our EQ models with a great drag coefficient of 0.20 in our EQS, for example. And with the Vision EQXX, we have taken this to the next level,” Starzynski said.

In the long run, how does Mercedes aim to differentiate itself from the others when electric technology is so similar?

“Our goal is to build the most desirable cars. This starts with the exterior design, comes into the luxurious interior combined with the new MBUX customer-centred and intelligent operating system. All this in conjunction with the Mercedes-Benz driving comfort, performance and efficiency, will make it the Mercedes-Benz customers are familiar with,” Starzynski said.

In other words, everything will change (technology-wise) and nothing will change (experience-wise) if plans go on track.