The luxury car industry in India is dominated by Mercedes-Benz, and the Germans are also well-represented in the electric vehicle (EV) market. When the EQC SUV was introduced towards the end of 2020, Mercedes was the first luxury automaker in India to introduce an EV. Since then, models including the EQB, EQS, and EQS AMG have been introduced. Could the new obstacle derail Mercedes’ plans for battery-powered vehicles now that Tesla has confirmed its intention to enter India in the future?
With a significant lead over all of its competitors, many of which have histories dating back several decades, Tesla is the market leader in electric vehicles (EVs) globally. In terms of pure sales volumes, vehicles with powertrains other than EVs are increasingly being ranked highly by models like the Model 3 and Model Y. Following his recent meeting with Prime Minister Narendra Modi, Tesla CEO Elon Musk announced that the company will spend significantly in India. However, Mercedes has a consistent strategy for the entire world: clean mobility with powerful performance and the level of grandeur that has traditionally distinguished the brand.
What did Mercedes-Benz say?
According to luxury automaker Mercedes-Benz, India shouldn’t grant any unique or exclusive concessions to American electric vehicle manufacturer Tesla. A day after telling Prime Minister Narendra Modi that he wanted to bring Tesla to India “as soon as humanly possible,” billionaire businessman Elon Musk released a statement on behalf of the company.
“The playing field should be level. Santosh Iyer, MD & CEO of Mercedes, told the Times of India that as long as the concessions are the same for all of the players and are applied equally to everyone, everything should be good. Mercedes, which has a facility outside of Pune and has been operating in India for the past 28 years, stressed that “fair spirit” should be upheld despite the government’s best efforts to pressure Musk into making investments.
The SL55 roadster was recently introduced by Mercedes for Rs 2.4 crore (ex-showroom, India). The majority of the company’s vehicles are assembled in Pune, including electric models like the EQS saloon.
A number of Indian automakers, notably Maruti and Ola, had already voiced their opposition to any special favours for Tesla. For the purpose of selling its vehicles in India, Tesla has been requesting reductions in import taxes. Prior to this, Musk had complained about the “challenges” and the amount of import duty in India. After first abandoning its plans from the previous year, Tesla recently, in May of this year, deployed a team to speak with government representatives.
The government of Prime Minister Narendra Modi requested Tesla offer locally-made vehicles, but the manufacturer wanted to import them first at lower tariffs to assess demand. As a result, talks between the two parties came to a standstill last year. Tesla was not allowed to import vehicles from its Shanghai manufacturing into India.
Before finalising a strategy for India, Tesla is concentrating on gaining a thorough understanding of regional rules and incentives for the EV business, according to a May 2018 Bloomberg story. Earlier, Nitin Gadkari, India’s minister of transport, said the company was welcome to produce electric vehicles there but should not import them from China.
