Appreciate Centre's 'clear stand and focus' towards electric cars: Mercedes

The German firm launched its top-end Maybach EQS 680 SUV, the first electric Maybach car to be launched in India

Mercedes-Benz India appreciates the Central government’s “clear stand and focus” towards transition from internal combustion engine (ICE) cars to electric cars, its Managing Director and Chief Executive Officer Santosh Iyer told Business Standard on Thursday. 

Iyer was referring to the statement of India’s G20 Sherpa Amitabh Kant two days ago wherein he made it clear that the country will continue with five per cent tax on electric cars and 48 per cent tax on hybrid cars for a “long period of time”.

“I think it is a very welcome statement. We are quite appreciative of the government’s stand on electric cars and a very clear focus for the transition towards electric cars because frankly, the electric car technology is expensive. You need support for the initial adopters. Over the period of many years, as the cost of technology comes down, it can be treated at par (with other cars),” Iyer said.

 

Mercedes-Benz on Thursday launched its top-end Maybach EQS 680 sport utility vehicle (SUV) at a starting price of Rs 2.25 crore (ex-showroom). It is the first electric Maybach car to be launched in India. Maybach is a top end luxury car line of the German company.

“I think the government is doing all the right things. At the central level, they have a clear distinction between electric cars, which are at 5 per cent GST, and other types of cars. At the level of state governments, most of them are offering zero road tax on electric cars. This drives down EV (electric vehicle) prices. This helps EV adoption for sure,” he mentioned.

As India aims to be carbon neutral by 2070, automakers in the country are divided over the best path forward. Japanese giants like Maruti Suzuki, Toyota, and Honda have been pushing for tax cuts on hybrids, arguing that EVs alone can’t bear the entire burden of reducing emissions. However, carmakers like Tata Motors, Hyundai, Kia, and Mahindra & Mahindra have been insisting that only a full commitment to EVs can truly decarbonize India’s roads.

Hybrid cars are subject to a GST rate of 28 per cent, while electric cars are taxed at 5 per cent. However, due to various other cesses and taxes on top, the effective tax rate on hybrid cars in India is about 48 per cent. 

Iyer said, “You heard Mr Kant day before yesterday. India’s future depends on how fast we do our green transition. We are committed to the same. It is important that we educate our customers to transition towards EVs.”

Mercedes-Benz sold 9,262 units in India in the first half of 2024, recording a nine per cent year-on-year growth. About five per cent of the vehicles sold in H1 of 2024 were electric cars. Last year, the share of electric cars stood at about two per cent.

Iyer stated that India is in the top 10 Maybach markets of the world.

“The booking as well as the deliveries for this car (Maybach EQS 680) will be opened in September itself. If I look at the success of EQG, which has got more than 80 bookings already, the EQS Maybach sales would be in strong three digits this year itself,” he added. EQG was unveiled earlier this year and its deliveries will begin from 2025.

Celebrities, including cricket players, actors, industrialists, are the target group for EQS 680.

“There was no EV option for them. They were asking us for EVs with all the bells and whistles and the comfort. For example, EQS Maybach has a champagne holder, mini fridge, etc. There are no compromises,” Iyer stated.