Mercedes-Benz notices increase in Indian buyers choosing EVs as first luxury car

Mercedes-Benz is experiencing an intriguing shift in the Indian luxury car market, with an increasing number of first-time luxury car buyers opting for electric vehicles (EVs). This trend is contributing to the German automaker's sales growth in the country, as revealed by the company's managing director in a recent interview with Reuters.

The luxury car segment in India is witnessing a significant upswing, with Mercedes-Benz, the market leader, achieving record-breaking sales figures. During the first half of 2024, Mercedes sold an impressive 9,300 cars in India. Five per cent of these sales were electric models, marking a substantial increase from the previous year when EVs accounted for only 2.5 per cent of their sales.

Santosh Iyer, the managing director of Mercedes-Benz India, shared these insights following the launch of the EQS 580 SUV, a spacious seven-seater electric vehicle with a price tag of approximately $168,200. Iyer highlighted an emerging trend among younger Mercedes customers who are gravitating towards EVs as a means of standing out from the crowd.

"Most of them are opinion leaders in their own small target groups, be it doctors, lawyers, architects. So they want to show that they have first transitioned," Iyer explained. While this group of EV enthusiasts remains relatively small, it is experiencing steady growth.

The company has observed a notable increase in the proportion of first-time luxury car buyers choosing electric vehicles. In 2024, about 15 per cent of all EVs sold by Mercedes in India were purchased by individuals entering the luxury car market for the first time. This represents a significant jump from 5 per cent in 2023, a growth that Iyer attributes to the introduction of new electric SUV models.

Although India's overall EV market is still in its nascent stages, it is showing promising signs of expansion. In the previous year, electric models constituted approximately 2 per cent of the total 4.2 million cars sold in India. The Indian government has set an ambitious target to increase this share to 30 per cent by 2030, indicating strong support for the growth of the EV sector.

Mercedes-Benz has demonstrated its commitment to the Indian market by announcing a fresh investment of USD 24 million in January. The company currently offers a diverse portfolio of 18 combustion engine car models and six electric vehicles in India, catering to a wide range of consumer preferences while positioning itself to capitalize on the growing demand for EVs in the luxury segment.