While the pandemic wreaked havoc across most vehicle segments in the past year, one segment that continued to grow is the luxury car market. In fact, luxury car makers are bullish about their growth prospects for this year and in this anticipation, they have launched products ranging from INR 1-5.5 crore catering to rich and ultra-rich Indians.
Moreover, luxury car manufacturers are now entering an uncharted territory that most mass market players are staying away from – electric vehicles.
In less than a year, the luxury car segment has seen three product launches from Mercedes Benz India, Jaguar and Audi India, all in the range of INR 1-1.3 crore. Others in the segment too are planning to bring EV products to the market.
Mobility Outlook spoke to various experts to understand what is driving luxury car manufacturers to launch electric vehicles in India, when the majority of mass car players are shying away from adopt this technology.
One of the primary reasons luxury car players are introducing electric vehicles is because this segment is not price-sensitive, unlike the others. Affordability is not the concern. Even the difference between comparable ICE products is not much. The premium is about the brand and the features as against mass-market products, where the delta becomes 2-2.5 times between an ICE vehicle and electric vehicle. Hence the propensity to buy is higher, said Ashim Sharma, Partner and Group Head, NRI.
The customers in the segment have multiple cars and EV would be just another car for them. Also, “this segment can afford a much larger battery and hence there is better distance range as well,” added Sharma.
For instance, Mercedes Benz EQC comes with a range of 455 km, Jaguar I-Pace goes up to 470 km and Audi E-Tron has a range of 484 km on a single charge.
| Brand/Product | Battery | Range | Price (INR. Crore) |
| Mercedes EQC | 80kWh | 450 | 1.07 |
| Jaguar I-Pace | 90kWh | 470 | 1.06 - 1.12 |
| Audi E-Tron | 71kWh / 95kWh | 379kms / 484 kms | 0.99-1.17 |
The other reason is that these luxury car players can show proof of concept with higher-end range products. So, when they launch mid-range products there is already acceptability of the technology.
Puneet Gupta, Director, IHS Markit said many automakers line up a lot of concept cars at the auto expo, flexing their technology prowess to showcase or communicate that said technology can come to other products.
“These all are CBU units not made in India. They are imported in very few numbers and even the carmakers expect to sell them in few hundreds. These launches are for consumers to experience the technology and get them glued to the brand,” Gupta said.
Corporate India is also re-thinking how their executives move, as they want to project themselves clean. Many companies are thus buying electric vehicles. Other than this, customers truly concerned about the environment are also making EV purchases.
Ashish Modani, Vice President, ICRA said the overall penetration of electric vehicles in the passenger vehicle segment will be between 3-5%. Luxury carmakers may command higher numbers as the consumers in the segment are very different.
“Due to strict norms in the west, most of the carmakers are forced to invest in electric vehicle technology platforms. The international market is moving towards EVs, and India is following up,” he reasoned.
Creating right ecosystem
In order to evolve a new technology, the first step is to create the right ecosystem. Manufacturers are not just creating the right infrastructure but also giving a comprehensive service package.
For instance, Mercedes-Benz India is offering eight years cover on its 80 KwH battery and a wall box charging unit, which is bundled at the cost of its EQC sedan. The company has installed 100 charging units across its network and is free for other users also.
Similarly, Jaguar I- Pace also comes with an eight-year cover of battery or 160,000 km. Moreover, I-Pace owners get a complimentary five-year service package and five-year of roadside assistance. Leveraging sister company Tata Powers’ capability, I-Pace customers can charge from over 200 plus charging stations along with 35 EV chargers installed in its retail network.
Among All, Audi India has also upped the ante and moved one step forward by launching multiple initiatives such as savings and range calculator, charging time calculator, Audi e-Tron Hub and digital retail.