German carmaker Mercedes-Benz will provide 50% of the road tax support to customers buying electric vehicles in October. The 50% support on the road tax is for those states where road tax is applicable at the time of registration of electric vehicles.

Mercedes-Benz's battery electric vehicle (BEV) portfolio comprises the EQB, the EQE 500 SUV and the EQS 580 sedan.

The carmaker also plans to support loyal customers who are keen to switch from their ICE vehicles to BEV by offering them a Sustainability Loyalty Bonus.

Currently, about 5% of Mercedes-Benz volumes come from EVs in India. In the next four years, the luxury carmaker is eyeing 20-25% of its sales from EVs. "Today, 5% GST on EVs is a big lever for EVs to be priced so competitively and hopefully that continues. If it continues, we will see a rapid transition to EVs," Santosh Iyer, managing director and CEO of Mercedes-Benz India, tells Fortune India.

Yet, a bulk of the carmaker's sales come from petrol-powered sedans and diesel SUVs. "Diesel cars are more expensive than petrol but consumers still prefer diesel because fuel efficiency, torque and residual value are better in diesel," says Iyer.

Till the time the country transitions to EVs completely, Iyer believes a mix of petrol and diesel cars is needed for the right balance. "Petrol vehicles cause CO2 emissions while diesel releases PM 2.5 particles. With a mix, one can balance these two critical pollutants. If you are skewed towards petrol, then you will be a bigger CO2 polluter," Iyer says.

The luxury carmaker continued to witness all-round demand for its products, despite facing supply challenges in Q3. Mercedes-Benz delivered 12,768 new cars to customers in India in the January-September period, registering a growth of 11% on a year-to-date basis.

The sustained demand for both new and existing products across entry and core segments was key in driving sales momentum in the January-September period. The demand for Mercedes-Benz, AMG, and EQS models belonging to the top-end vehicle (TEV) segment continued to remain strong, contributing approximately 25% of Mercedes-Benz's sales volume in the first nine months of the year. "Demand for the TEV segment continues with GLS, S-Class, S-Class Maybach, GLS Maybach, AMGs and EQS witnessing top customer preference," the carmaker says in a statement.

"Strong desirability for Mercedes-Benz cars buoyed our January-September sales momentum. However, we were not able to supply as per the full market potential, especially for new products like the GLC; though we are making every effort to fulfil customer expectations, despite current supply chain challenges," says Iyer.

"The TEV segment continues to grow in customer preference with up to 22% YTD growth, comprising 1 out of every 4 Mercedes sold in India," he says, adding that the launch of EQE 500 SUV has given fillip to the automaker's electric offering.

Mercedes road tax

Mercedes-Benz offers 50% road tax support for EVs