Setting the record with acceleration, range and performance, US-based Tesla, Vietnam’s Vinfast, China’s BYD, and other global luxury cars are introducing futuristic electric models in the Indian market. An incredible high speed and space-inspired attributes have initiated speculation in the automotive industry worldwide.
Features like speed, luxury, range, and future technologies will influence India’s burgeoning electric luxury market. As the policy regarding the electric vehicle import changes, it is now priced at USD 35,000 or higher when the import duties are reduced to 15%. It will be contingent on automakers who are considering investing approximately USD 500 million in the next 3 years to establish manufacturing plants in India.
The policy of ‘Floor but no ceiling’ helps the importers ship the luxury electric vehicles as completely built-up units. Many luxury EV makers in India pursue CBU-led strategies that attract more than 100% import duties. For example, if we talk about Mercedez Benz, it sells three cars, of which only one is assembled locally. In BMW all five electric models are CBU-based.
With a 7% share in the total luxury car market last fiscal year, luxury EVs are expected to grow to double digits in the next 2–3 years.
In recent years, Xiaomi, a Chinese smartphone brand, has initiated a comment on its entry into the EV market. They are likely to introduce SUVs, intensifying the competition in the luxury EV market. However, it is yet to be seen how pricing strategies and technology will compete with the established players.
As per industry watchers, the sale of luxury electric cars will coincide with the expanding base of affluent Indians. According to the latest Hurum Global Rich List 2024, India ranked third globally.
Drawing inspiration from aerospace technology, luxury car companies are ready to introduce autonomous vehicles which will feature no steering wheels, blistering acceleration, and cock-pit interiors. The software will not only impact the basic functionality but also advanced features like a driver-assistance system, leading to autonomous driving. These software-centric approaches will fundamentally change the car ownership experience. In the SAE level 3 system, using a multitude of sensors, Mercedez Benz had made a significant process. For extra safety and convenience, high-end buyers are typically the target audience. For automakers, it’s a long-term experience, as their core customers are the base for protecting market share.
With an aggressive EV road map, luxury car makers are planning to double their electric portfolio. Mercedez Benz India is planning to further deepen the BEV penetration with 4-5% of the annual sales. The EV ecosystem will be built with fast chargers, a future-ready BEV workforce introducing long-range EVs and lower entry price barriers.
Although there are various obstacles, India’s luxury EV market experts believe that the market holds immense potential in the long run. With breakthrough technologies, solid-state batteries offer an increase in the driving range and faster charging. It will be coupled with growing consumer demand for sustainable mobility, increasing the adoption of luxury EVs in the country.
