On October 2, Elon Musk, the high-profile Chief Executive of Tesla, the world's most valuable automobile company, created a flutter in India when he hinted the company could be on its way to the country next year.
"Next year for sure," Musk tweeted in response to a query by a Twitter account, Tesla Club India, on the long-anticipated entry in the Indian market. The Twitter account was started in March 2019 by electric vehicle (EV) enthusiasts Nikhil Chaudhary and Arun Bhat S. and has over 4,400 followers till date.
Barely a week later, Mercedes Benz, India's largest luxury car maker, launched EQC, the country's first luxury EV. Given that electric mobility in India is still at a nascent stage, and issues such as high cost, lack of charging infrastructure and range anxiety - due to which Maruti Suzuki and other mass market companies are yet to launch EVs - the move may seem a bit premature.
Yet, luxury car makers are ready to foray into the electric segment in India. Mercedes will soon be joined by compatriot Audi with its e-tron and Jaguar Land Rover with I-pace later this year. This will be followed by BMW bringing in Mini Cooper SE EV and Volvo introducing the electric version of its compact SUV XC40 in the second half of next year. As indicated by Musk, Tesla's high-octane entry into India, with possibly its Model 3, could happen around the same time.
Global automotive history is replete with examples of luxury car industry coming out with innovations that later trickled down to mass market segments. It will be no surprise if it happens in electric mobility as well.
The deeper pockets of luxury car customers and their lifestyle are a great help in getting over some of the handicaps that plague electric cars today. "Our industry has an advantage that luxury car owners have greater affordability and independent houses or offices, which means setting up a dedicated charging point for their cars is not an issue," says Martin Schwenk, Managing Director and CEO, Mercedes Benz India. "Luxury cars will also take the lead in advanced battery management system to offer greater range, so a customer needs to put it on charge only once, or at the most twice, a week. The affluent also tend to fly more when they travel out of the city, be it for business or leisure, and use cars predominantly for shorter trips within cities. An EV is perfect for them."
The biggest USP of a luxury EV is obviously the lack of any tail pipe emission which, in today's day and age, has become an important consideration. It goes well with the perception of an industry leader or celebrity who wants to be seen doing the right thing. "Our global experience shows that luxury EVs are bought by people who are aware of their responsibility to reduce carbon footprint and want to act upon it while retaining the comfort and technological prowess of a luxury car," says Charles Frump, Managing Director, Volvo Cars India. "Luxury is a very small segment of the overall car market in India, but with electrification, is poised to grow much faster. We believe that luxury car buyers who typically own multiple cars will adopt EVs much earlier than others. The penetration of EVs in the luxury segment is likely to be much higher. We feel this is the right time to introduce EVs in the Indian market. We plan to capture a reasonable portion of the market in the near to medium term."
EVs' potential to revolutionise the luxury car is immense and goes beyond just carbon footprint. With no need for a high performance engine, an exhaust system or extensive insulation that is required to keep the clatter under the bonnet from filtering into the cabin, an EV is lighter, with more space inside the cabin. The battery pack lowers the centre of gravity as it is generally placed on the floor and ensures balanced distribution of weight between front and rear axles. These factors enhance performance, ride and handling aspects.
Ian Callum, the former director of design at Jaguar credited with such iconic cars as Aston Martin DB7 and Vanquish (from James Bond's garage) and more recently Jaguar XF and F-type, also worked on Jaguar I-pace. He believes electrification gives engineers and designers incredible opportunity and freedom to change a car like never before.
"The most natural way to start with an electric car is to make more use of the space given. In case of I-pace, we have effectively moved the cabin forward. The front-end is reduced, with very few mechanical entities taking up that space, and so the occupants get much more room in the cabin. A luxury electric car will continue to have the premium feel of a luxury sedan but with more space," he says. "The whole notion of luxury for future cars will increase with features and well-being. The silence of the car will be a luxury in itself. There is no engine noise and no vibration. As for performance, electric cars already offer more instant torque, to a level of supercar and sports car, than engine-powered vehicles. It is a different world compared to engine-powered cars, which operate on a gradient - from family saloons to SUVs to high-performance sports cars."
The fact that electric cars punch well above their weight is aptly exemplified by EQC. Based on the same platform as Mercedes' GLC compact SUV, it gives 408 hp power and 760 NM torque on the tap that enables it to sprint from 0 to 100 kph in just 5.1 seconds. GLC's petrol engine has peak power of 197 hp, torque of 320 NM and can do 0-100 kph in 7.8 seconds. The diesel version has maximum power output of 194 hp, torque of 400 NM and gallops to 100 kph from zero in 7.9 seconds.
To find comparable performance in cars from the Mercedes garage, one would have to look at supercars under the high performance AMG range. Similarly, Audi's e-tron, despite being much smaller, offers performance that is comparable to that of its largest petrol powered SUV, the Q8.
"The buyers of luxury electric cars are first movers and early adopters. They know the merits of going electric. They are connoisseurs with an existing fleet of cars," says Balbir Singh Dhillon, Head, Audi India. "Existing luxury car buyers will also be our target customers. One of the reasons customers opt for EVs is the 'fun to drive' element. EVs, with stronger batteries today, provide peak torque right from the start without any delay."
As pricing of EQC shows, the first crop of these electric luxury cars will not come cheap. Taxation is a major factor in that. With volumes expected to be limited - Mercedes is gauging the mood with 50 units of EQC to begin with - they will be imported as completely built units attracting an overall tax of 105 per cent at ex-showroom level. This inflates the cost of EQC in India, which otherwise costs under $80,000 (Rs 60 lakh) in Germany. Similarly, the upcoming Jaguar I-Pace is expected to cost upwards of Rs 1 crore in India even though it costs just 65,000 (Rs 62 lakh) in the UK.
The high price, however, need not be a bad thing. This keeps it out of reach of even a large swathe of premium consumers and lends exclusivity to the brand, something considered very essential for a luxury car.
"It is a balance one needs to strike to arrive at a price that ensures exclusivity without being too prohibitive or affordable but not too commonplace. The best luxury carmakers do this successfully with multiple products," says Vinay Piparsania, an industry veteran with over 25 years of experience. "Every new technology, in its initial phase, is expensive and so it will be with electrification. A manufacturer that offers the best package will command a premium. The customer is also high profile, is progressive and values novelty factor on technology higher than most others. Influencers and celebrities also have deeper pockets."
For long, the rich have been berated for burdening this planet with ostentatious display of wealth and their swanky gas-guzzling set of wheels. It may just be a matter of perception but probably it will take an EQC, I-Pace or e-tron in the garage to change that. It might fill the neighbour next door in his Ferrari with envy as well.