New Delhi: The US-based electric carmaker Tesla, which is also the most valued automaker now, after years of dilly-dallying, has accomplished it with a bang. Tesla incorporated its Indian entity Tesla India Motors And Energy Private Limited in Bengaluru last week. This has made a flutter in the Indian automotive industry as other global luxury electric car makers have been betting on the Indian market in a big way. Players like Mercedes-Benz are already here. Others are on the way.
According to the story broken by ETAuto in December, Tesla would be introducing its best selling Model 3 in the Indian market at an expected price of about INR 55 lakh-INR 60 lakh.
The Indian electric vehicle market is still at a nascent stage and has not been able to take off as in the US, China or Europe. But this has not deterred premium carmakers from making inroads into the Indian market.
While the mass segment vehicle manufacturers are still sceptical about bringing out their electric cars because of the high cost, range anxiety and lack of infrastructure, India’s largest premium carmaker Mercedes-Benz has launched its premium electric SUV EQC on October 8, 2020, at an introductory price of INR 99.30 lakh.
We have already sold out the initial allocations for the EQC and have now started the bookings for the next allocations, which will be available in a couple of months.Santosh Iyer, VP, Sales and Marketing, Mercedes-Benz India
So what gave the push to the German car manufacturer that others were lacking? “Mercedes-Benz is aiming to get the first-mover advantage by bringing India’s first luxury EV. It is not a volume model, but is for early-adopters who want to own a luxury EV”, the company’s MD and CEO had told ETAuto at the time of its launch.
And notably, the carmaker has got a better response than expected from customers.
“We have sold out the initial allocation for EQC and have started the bookings for the next allocation, which will be available in a couple of months”, Santosh Iyer, vice president, sales and marketing, Mercedes-Benz India, told ETAuto.
Launched globally in 2019, 20,000 EQCs were sold in CY 2020. Iyer is convinced of the long-term potential of the luxury EV segment. Although the company is not looking at volumes currently, he believes that EQC will gradually pick up volumes as there will be higher penetration with the development of the charging infrastructure across the country.
Others on the way
Mercedes-Benz will soon be joined in this race by its peers in the segment who have also lined up their launches in 2021, and the company is taking it as a good sign rather than competition. “It’s good to see that more players are now exploring the luxury EV segment as it will further strengthen and widen the segment, thus benefiting the customer overall,” Iyer said.
Audi which will be bringing its e-tron later this year, is equally upbeat about the India prospects. Balbir Singh Dhillon, head of Audi India, told ETAuto that the target clientele of the Audi e-tron is at the very top of the pyramid and their cars will cater to their needs – both in terms of luxury and green technology.
According to Dhillon, buyers of luxury electric cars are the first-movers and early adopters as they know the merits of going electric. And further, an electric car will be an addition to their existing fleet. One of the few reasons customers opt for an electric vehicle is the instant acceleration and the fun-to-drive element.
The target clientele of the Audi e-tron is at the very top of the pyramid and their cars will cater to their needs – both in terms of luxury and green technology.Balbir Singh Dhillon, Head of Audi India
Jyoti Malhotra, director (sales and marketing), Volvo Car India, also believes that luxury electric car buyers could lead the adoption of electric cars in India as they are aware of their role in environmental sustainability and their ability to overcome infrastructure constraints if any. As they own more than one car, range anxiety is unlikely to affect their decision to buy an electric car.
Volvo will be launching XC40 Recharge in India in the second half of this year. The company’s plan is to launch the full portfolio of electric cars here as they go about their commitment to reducing CO2 footprint per car by 40% by 2025.
The Swedish carmaker plans to keep the price competitive and feels that a long-term tax regime for BEV will create a conducive ecosystem for introducing these cars.
The tax barrier
Mercedes-Benz India thinks that luxury EVs’ price barrier due to the high import duties needs to be rationalised, making EVs more affordable for individuals. The company initially imported limited, completely built EQC units. The electric SUV attracted an overall tax of 105% at the ex-showroom level taking its price beyond INR1 crore. The luxury SUV was launched in the German market at an introductory price of EUR 71,281 (approx INR 63 lakh).
Volvo plans to keep the price of XC40 Recharge, which it will be launching in the second half of the year, competitive and feels that a long-term tax regime for BEV will create a conducive ecosystem for the introduction of these cars.Jyoti Malhotra, Director (Sales & Marketing), Volvo Car India
India may hike import duties by 5%-10% on more than 50 items, including electronic components, in the upcoming budget, according to a Reuters report on January 18, 2021. The report quoted two government sources saying the duty hikes could impact electric vehicles potentially hurting the automakers planning to launch their cars in India this year.
Similarly, the BMW Group is looking into the possibility of launching an electric car under the Mini brand in India, probably Mini Cooper SE.
While the enthusiasm is clearly not lacking with such an impressive line-up of launches through the year, it remains to be seen how much volume will they be able to generate in the long-term, especially when the government is considering hiking the import duties which can play the spoilsport. Further, how will they be able to compete with one another? With its dedicated fan base, will Tesla have an edge over its competitors? This space will be worth watching for!
