We will take 3-4 years to mass manufacture EVs, says Mercedes-Benz's Santosh Iyer

Santosh Iyer, CEO and MD and Lance Bennett, VP Sales and Marketing launching the new EQE 500 4MATIC SUV_3

Mercedes-Benz India CEO Santosh Iyer has stated that the widespread localisation of EV components, for Mercedes-Benz India, could take up to 3-4 years. The brand, which launched India’s first locally assembled luxury EV – the EQS – last year, said that it will not be locally assembling EVs for two years. Mercedes-Benz has since added two more EVs to its portfolio – the EQB and its latest offering the EQE SUV.

The EQE SUV is the GLE’s electric equivalent but is based on Merc’s proprietary born-electric EVA platform. At a time when its rival brands are still offering electrified versions of its ICE offerings, the presence of two born-electric EVs puts Mercedes-Benz India ahead of the curve. Although, according to Iyer, not all consumers are fully informed of the benefits of such technology. “Many customers would prefer an EV built on a combustion car platform. They aren’t aware that if the EQE looked like the GLE, it would lose the aerodynamics which allow it to have a range of 550 km. The EQS wouldn’t have a range of 750km if it was built on an S-Class platform”.

The EQE, which has been launched at an introductory price of Rs 1.39 crore (ex-showroom) features a 90.56 kWh battery, has been brought-in as a CBU and is only Rs 20 lakh cheaper than the EQS, which has a 107.8 kWh battery and a WLTP claimed range of 850km. When asked about which way consumer preferences would lean, Iyer states that the use case of the two EVs is different, with the EQS targeted at those who love the form factor of a sedan and enjoy driving the car themselves, as often as they do being driven in one.

“The EQS arrived with features such as rear-wheel steering which made it more dynamic to drive. We had to later include a rear seat entertainment package, along with cushions to better address the needs of those at the back-seat” The EQE SUV in comparison, while less powerful and with lesser range, is a more practical consideration, given its high ground clearance, and greater interior space.

“The EQE 500 SUV has the longest wheelbase in the segment. Longer than the GLE’s” says Iyer, adding that while most mass-market EV counterparts of ICE variants are nearly 80-90 per cent more expensive, Mercedes-Benz offers greater price parity, by pricing the EQE only 30 per cent higher GLE (Rs 1.08 crore) as possible, making it a far more practical proposition given its low running costs.

Mercedes-Benz India, a clear market leader in the luxury car space, with over 50% of the market share currently aims to strengthen its portfolio so as to give customers a variety of options. Shortly after the launch of the EQB and its ICE equivalent the GLB, Iyer claimed that demand was nearly for both variants, with the EQB edging out the GLB in time. Merc then introduced a slightly more powerful variant of the EQB within months.

Iyer also remains gung-ho about the prospects of diesels in the luxury space despite a proverbial sword constantly dangling over diesels, thanks to policymakers. At an annual ACMA conference, Union Minister Nitin Gadkari floated the idea of applying an additional 10% GST on diesel vehicles.

The statement was later retracted, but it once again brought the future of diesels into question. Mercedes-Benz India, at present, sees a 50-50 split between its diesel and petrol sales, with the Delhi NCR region serving as an exception due to its rule of banning diesel cars which are older than 10 years. “Most manufacturers have exited diesels because they're expensive. Our customers are willing to pay the additional cost of diesels because diesels continue to have greater residual value than petrol vehicles.

“That affinity for diesels is not going to change overnight,” says Iyer, adding that diesels are a more effective stop-gap measure until EVs become the norm. A fact, he feels, is not entirely understood by policymakers, “Our BS6-compliant diesels produce far less CO2 than petrol engines, so from an emissions standpoint, they’re better”. Iyer told Moneycontrol that the brand is ready to pivot in any direction, should policies require it to, adding that its petrol-powered engines are already flex-fuel compatible and can take an ethanol blend of E10 or E20, whenever that rule is implemented.

But the focus for Mercedes-Benz will clearly be on electrics. Bengaluru currently has the largest Mercedes-Benz R&D facility outside Germany. And this bodes well for Mercedes-Benz India’s software-related plans. “We consider ourselves more of a software company today” claims Iyer, stating that although he cannot share details about the brand’s upcoming native operating system, the R&D facility was used to create a new app that allows all EV owners to utilise Mercedes-Benz’s pan-India charging network. “I have 140 charging outlets out of which 40 are superchargers which I am opening up to all brands. Not only luxury but also mass-market brands. This is getting powered by an app, developed with the support of our Bengaluru facility.”

Iyer has however confirmed that a lot of the development for the brand’s game-changing operating system has been done in Bengaluru.

Merc’s own operating system will allow customers the right to privacy, in a manner third-party applications cannot offer. Set to power the first generation of EVs built on Merc’s upcoming Mercedes Modular Architecture (MMA), it would give customers better control over data privacy settings, while also allowing the brand to remotely fix issues and bugs ailing the car.

It would also allow the brand to carry out predictive maintenance. However, it’s not entirely uncontroversial, given that higher performance and added features will only be accessed through paid subscription packages and software bundles. Mercedes-Benz claims that the OS will also allow passengers to interact with their environment with the infotainment system offering information on nearby charging stations, restaurants and other locations.

In terms of software efficacy, Mercedes-Benz seems to have an advantage even over global market leader Tesla. Mercedes-Benz USA is the only company that has been allowed by the government to run its Level 3 autonomous software on public roads.

However, Tesla appears to be outselling the brand, even in Europe. Speaking of what Tesla’s impending arrival bodes for the Indian luxury car market, Iyer said that he is all for it. “Anything that allows the Indian EV market to expand is good for the entire ecosystem and we welcome it.” says Iyer, adding that Tesla wouldn’t likely be a direct threat as it will in all likelihood target the volume segment in India, instead of assembling its more premium EVs costing over Rs 60 lakh.