In Short : Mercedes-Benz plans to increase electric vehicle (EV) production in India to achieve carbon neutrality. This initiative aligns with the company’s global sustainability goals and aims to meet the growing demand for eco-friendly transportation solutions in the Indian market.
In Detail : Mercedes-Benz is ramping up its electric vehicle (EV) assembly operations in India, aiming not only to achieve cost efficiencies but also to advance its ambitious carbon neutrality goals. The German luxury carmaker, which currently assembles its flagship electric sedan EQS at its Chakan plant, is evaluating the localisation of additional models based on market demand, according to a senior company official.
“Our ultimate objective is zero-emission mobility and a carbon-neutral setup, which encompasses not just tailpipe emissions but also the recyclability of the vehicle and the carbon footprint generated during production,” stated a Mercedes-Benz India official. He elaborated, “Adopting a holistic approach necessitates producing EVs, and we will persist in this direction as market demand evolves.”
Mercedes-Benz India commenced the assembly of the EQS in October 2022 at its Chakan facility. This model is currently the only locally assembled EV among the four electric models sold in India, which include the SUVs EQA, EQB, and EQE, in addition to the EQS sedan. These vehicles are priced between 66 lakh and 1.6 crore. The official acknowledged that local assembly provides significant cost advantages, noting, “Localisation allows us to offer the EQS at around 1.5 crore, which would otherwise be more expensive. This cost benefit is substantial.” Beyond cost savings, local assembly also enhances the company’s expertise in EV technology, which is crucial for its long-term strategy. “Our flexible production line allows us to manufacture both EVs and combustion engine vehicles. This flexibility is essential as we transition towards our global and Indian sustainability targets,” he added.
Globally, Mercedes-Benz has set a target to make its entire fleet of new vehicles net carbon-neutral across the entire value chain and throughout the vehicles’ life cycle by 2039. Additionally, the company aims for all production plants worldwide to operate on 100% renewable energy with zero CO2 emissions by the same year. Under its Ambition 2039 initiative, Mercedes-Benz plans to cut CO2 emissions per passenger car in the new vehicle fleet by up to 50% across all stages of the value chain by the end of this decade compared to 2020 levels.
In the first half of 2024, Mercedes-Benz reported a 9% growth in sales in India, totalling 9,262 units – the highest ever half-yearly sales for the company in the country. Notably, EVs accounted for over 5% of these sales, with a 60% increase in EV sales compared to the same period last year. The expansion of EV assembly in India aligns with Mercedes-Benz’s broader strategy to achieve environmental sustainability and cost efficiency. By localising production and fostering EV expertise, the company is well-positioned to meet the evolving demands of the Indian market while contributing to global carbon reduction goals.
