Luxury EV rush
Vijay C Roy
Projected as a mass market product, it would come as a surprise that the adoption rate of electric vehicles in the luxury segment (priced at Rs 50 lakh and above) is almost three times higher. Given the current scenario, industry insiders say electric vehicles could represent half of all luxury car sales in India by the end of the decade. It is estimated that the premium segment is expected to touch one lakh units per annum by 2030.
In order to cash in, prominent luxury vehicle makers such as Mercedes Benz, BMW and Audi are aggressively gearing up to leverage the burgeoning demand.
Mercedes Benz at present offers three BEVs (Battery Electric Vehicles) in India and plans to introduce more this year. “We are committed to an all-electric future and hence, BEVs remain a focus area. Our EQB SUV, EQE SUV and EQS luxury sedan start from a price point of Rs 80 lakh, going up to Rs 1.65 crore. The BEV portfolio witnessed a robust 130 per cent growth in the first quarter of 2024, with a penetration of 6.5 per cent in our total sales,” says Santosh Iyer, managing director and CEO, Mercedes-Benz India.
BMW Group India has a diverse electric product range — BMW iX (sports activity vehicle), BMW iX1 (compact sports activity vehicle), BMW i7 (limousine), BMW i4 (sedan) and MINI SE (hatchback). The price starts from Rs 53.5 lakh (MINI 3-door Cooper SE), going up to Rs 2.03 crore (BMW i7).
According to Vikram Pawah, president, BMW Group India, EV sales have grown at a “tremendous rate year-on-year”. In 2023, BMW Group-EV clocked over 325 per cent growth (1,474 units). “The market demand for sustainable BMW and MINI EVs is rising as they provide a great level of technological sophistication, driving pleasure and comfort,” he says. In 2022, BMW Group India sold 347 electric cars.
Audi India has six EVs on sale in India, all priced above Rs 1 crore (ex-showroom). The variants are Audi Q8 50 e-tron, Audi Q8 55 e-tron, Audi Q8 Sportback 50 e-tron, Audi Q8 Sportback 55 e-tron, Audi e-tron GT and Audi RS e-tron GT. The price range varies between Rs 1.14 crore and Rs 1.95 crore. According to the company, the Audi Q8 e-tron is at the heart of its electric mobility strategy and gives the company a strong base to build upon.
The companies are offering ‘360-degree solutions’. Iyer says, “Every second Mercedes sold in Q1 of 2024 is financed by Mercedes-Benz Financial Services. The Star Agility programme is immensely popular among our salaried and business customers, as they fulfil their aspirations and desire to own a Mercedes Benz, suited to their specific financial requirements.”
According to him, Star Agility Plus allows the customer the freedom and convenience to buy the vehicle at residual value, continue to finance it or return the vehicle at the end of the contract period.
BMW Group India is also offering BMW India Financial Services.
The BMW 360° financial solution includes “attractive monthly instalments, reduced rate of interest for select models, assured buy-back options and flexible term-end opportunities, among other benefits”. Customers can choose from a range of tenures, with an assured buyback facility. “All these benefits come together to present a very attractive and comprehensive package,” says Pawah. He adds that eight out of every 10 cars financed by BMW India Financial Services are through BMW and MINI 360°.
Models in the pipeline
“We will double our BEV portfolio to six vehicles by the end of 2024. Mercedes Benz will continue to create a strong BEV charging infrastructure and service support across India, along with customer awareness initiatives,” says Santosh Iyer. Rival BMW is preparing to introduce two products this year. Audi aims to bring the all-new Audi Q6 e-tron to India to have a bigger pie of the market.
Hyundai, too, has launched its premium EV SUV, the Hyundai IONIQ 5, at an ex-showroom price of Rs 46.05 lakh. Over 1,400 units have been sold already.
BYD India has introduced SEAL, which starts at Rs 41 lakh (ex-showroom) and goes up to Rs 53 lakh. It recently surpassed 1,000 bookings for its luxury sport sedan just over two months after the launch in India.
Tax Benefits & incentives
Some state governments have exempted electric vehicles from road tax, which is substantial in case of luxury vehicles. In addition, according to the Indian Income Tax Act, businesses can claim a depreciation rate of 40 per cent on the cost of an electric vehicle each year. In the case of petrol and diesel passenger vehicles, the depreciation rate is 15 per cent every year. This is applicable to business owners and individuals who own enterprises and work independently.
