Mercedes-Benz Considers Assembling More Electric Vehicles in India

German luxury carmaker Mercedes-Benz plans to assemble more electric vehicles at its Indian plant, an investment that aims not only to reduce costs but also to achieve its goals of emission-free mobility and carbon neutrality.

The company, which assembles its flagship EQS luxury electric sedan at its Chakan plant, is considering localising other models based on market demand.

According to media reports, Santosh Iyer, Managing Director and CEO of Mercedes-Benz, said, “Our ultimate goal is emission-free mobility and carbon neutrality, which means not only the exhaust emissions but also the recyclability of the car and the carbon footprint that we generate by manufacturing these cars.”

He added: “We need to look at it holistically, so producing electric vehicles was a logical step and we will continue in this direction as market demand changes.”

Mercedes-Benz India has been assembling the EQS at its Chakan plant since October 2022. It is the only model currently locally assembled out of the four electric vehicle models sold in India — the EQA, EQB and EQE SUVs and the EQS sedan. These models are priced between ₹66 lakh and ₹1.6 crore.

Acknowledging the benefits of having a local assembly, he said, “I think the localisation helps us get some cost benefits. Today, if you see, EQS is available for around INR 1.5 crore, which would otherwise be a bit more expensive. So it really helps us.”

Apart from the cost advantage, Iyer said, “It also helps us gain a lot of knowledge about electric vehicles because it’s a long-term setup. We currently produce electric vehicles on the same line as internal combustion engines. So we have a very flexible manufacturing facility where we can produce both. I think all these elements are also essential to building our knowledge base and building it as we make the transition that we have announced globally and in India as well.”

Mercedes-Benz has set itself the global goal of achieving net carbon neutrality for its entire new vehicle fleet across the entire value chain and vehicle life cycle by 2039. By the same year, the company also plans to operate its production plants worldwide entirely on renewable energy, thereby achieving zero CO2 emissions.

In addition, as part of its Ambition 2039 initiative, Mercedes-Benz intends to reduce CO2 emissions per passenger car in its new vehicle fleet by up to 50 percent across the entire value chain by the end of the decade compared with 2020 levels.