Luxury car brands must lead the thrust to electrify our streets

livemint.com:

₹8.3 lakh per year can afford luxury cars, a quick pace of upward mobility spells optimism over big-ticket purchases ahead. If Mercedes logged sales in 2023 that amount to 87% of its annual capacity of 20,000 units, as reported, it would need to scale up local assembly soon. Where EV models figure in its new roll-out mix may depend on the carmaker’s supply outlook.

Since luxury marques cater to relatively price inelastic demand, they have more space than other carmakers to experiment with EVs at the edge of new technology. But inelasticity is not the same as insensitivity. Even in the luxury business, sticker prices dropping could see sales zoom.

As of now, high import tariffs mean global carmakers cannot ship models into India for test launches at anything but hugely bloated local prices. Yet, what we need at this juncture is a burst of competition among upmarket EV options, with local EV supply chains emerging alongside support infrastructure. Lowering entry barriers could promote fresh rivalry and populate our streets with electric cars that are competitively priced in global comparison.

Less-taxed imports into India was what Tesla had asked for; today, as time ticks on, this US-based EV-maker seems in long negotiations with New Delhi over an entry package. China’s BYD has ambitions too. For EVs to be a ‘Make in India’ success story someday, we should ‘electrify’ the market’s upper end as rivalrously and swiftly as possible.