India’s road to decarbonisation won’t be straight, writes Mercedes-Benz India’s Santosh Iyer

IT WOULD BE A glorious thing if the road to decarbonisation was a dead straight electric highway. However, the journey to net carbon neutrality demands a more nuanced approach. At Mercedes-Benz, we have charted a holistic course, where battery electric vehicles (BEVs) and internal combustion engine (ICE) both co-exist, as we remain strategically focussed and tactically flexible: listening to what customers want, what they desire, and what they prioritise. I firmly believe that while electric vehicles are the only viable solution for achieving decarbonisation, we also need to have a fluid market-based approach. We are taking necessary steps to go all-electric, but customers and market conditions will set the pace of this transformation. We want to cater to diverse customer needs, be it a superior all-electric drivetrain or a high-tech combustion engine. We call it being ‘strategically focussed’ and staying ‘tactically flexible’ — allowing customers to pick the powertrain that suits them best. The luxury segment remains the cradle for technological innovation, offering unique opportunities for discerning customers. BEVs now account for over 8% of our annual sales, a significant scale up from 2-3% even a couple of years ago. This growing penetration also underlines that BEVs will lead the charge in the decarbonisation transformation journey, and customers should have access to all kinds of technologies that contribute to the decarbonisation goals. Decarbonisation There may be debates and differences in opinion about the pace of BEV transformation, but commitment to future electric mobility is of paramount importance. The automotive industry has to pursue a holistic approach to achieve decarbonisation goals, and pioneering technology will continue to play an important role in achieving sustainability goals. The ideal co-drivers While the industry is producing the cleanest combustion engines, innovations such as the 48V ISG technology add additional horsepower and torque whenever customers need in an ICE vehicle. These systems, now standard in the product portfolios of luxury cars in India, underscore that the evolution of ICE technology can also reduce emissions, without waiting for infrastructure development to take place. I strongly believe that OEMs should offer a comprehensive range of vehicles, including petrol, clean diesel, mild hybrids, and BEVs, thus offering a diverse choice for customers to pick from. Alongside ICE innovations, the industry should also aggressively expand its BEV capabilities. From introducing world-class products, services to building a comprehensive BEV ecosystem with robust charging capabilities, the de-carbonisation efforts of the Indian automotive industry will be a long-drawn effort. I like to call it more of a marathon than a sprint. However, the crucial point in this transition remains in not betting everything on just one technology. The industry should develop every powertrain while building electric capacity, and this, in my opinion, would be the most viable road to responsible decarbonisation. We must prioritise emission reduction through various avenues, rather than waiting for the ideal infrastructure conditions to be set up. This approach aligns even with European leaders’ ‘technological openness’, supporting EV growth while accommodating other technologies that contribute to global decarbonisation goals. Most importantly, the Indian automotive industry needs to demonstrate that decarbonisation need not sacrifice business viability. By maintaining technological diversity, the automotive industry needs to create a sustainable emission reduction model, which underlines infrastructural realities while building capabilities for tomorrow’s electric future. In this practical approach, we have to appreciate what the customers desire and wish for. An inflection point India’s policymakers must hence choose between technological mandates and openness. Europe’s experience shows the risks of premature bans can create a ‘Havana effect’ where consumers keep retaining older, polluting vehicles. We need holistic policies that accelerate fleet renewal across all clean technologies, including efficient ICE vehicles. This also underscores staying technology agnostic and creating pathways for a decarbonised future alongside augmenting the BEV infrastructure. With the earnest cooperation of policymakers, sustained collaboration with industry, timely and outcome-oriented dialogues with academia, and meaningful dialogues with civil society and corporates will be crucial in driving our decarbonisation journey ahead. The question isn’t whether India will decarbonise; it is how quickly we can do it, adopting practical, technology-diverse approaches that work within our realities. The road towards carbon-neutrality will therefore not be a straight electric highway but will have a few twists and turns. However, we can strive to reach the destination faster and smoothly, given we maintain a keen eye on the road and on the destination ahead. (The author is MD & CEO, Mercedes-Benz India. Views are personal.) Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.

India’s road to decarbonisation won’t be straight, writes Mercedes-Benz India’s Santosh Iyer

Sign in to read full story