As India’s wealthy embrace electric vehicles with speed and style, the mainstream consumer weighs every step carefully.
23 Jun 2025 | 9908 Views | By Ketan Thakkar & Prerna Lidhoo
Walk into any high-street dealership along Delhi’s bustling Ring Road, and you’ll witness two EV narratives unfolding side by side. In the mass-market showrooms, conversations still begin with price points, state subsidies, and range reassurance — EVs are an option, but not yet an automatic choice. Next door, in the ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
Walk into any high-street dealership along Delhi’s bustling Ring Road, and you’ll witness two EV narratives unfolding side by side. In the mass-market showrooms, conversations still begin with price points, state subsidies, and range reassurance — EVs are an option, but not yet an automatic choice. Next door, in the plush, glass-walled luxury showrooms, the tone is different: buyers come armed with spec comparisons, probing sales consultants about 0–100 acceleration times, kilowatt-hour ratings, battery chemistry, and over-the-air software capabilities.
The data reflects this split-screen reality. Passenger vehicle EV penetration hit 4.1% in May 2025 — a new high, and a significant rise from just 2% two years ago. The mainstream EV market is showing clear momentum, helped by a wave of fresh product launches that span compact crossovers, premium SUVs, and upcoming lifestyle EVs. Tata Motors, for instance, has expanded its all-electric portfolio with the Curvv EV and the highly anticipated Harrier EV, offering a blend of contemporary design, connected technology, and long-range capability.
Mahindra has entered the fray with the XEV 9E and the futuristic BE.06, designed on its dedicated INGLO platform. MG Motor India, on the other hand, is stepping beyond the city-focused Comet with the launch of the Windsor Pro, a more spacious and premium EV designed to bridge the gap between urban compact and executive electric vehicles.
Yet despite this growing variety and rising awareness, mainstream EV adoption remains measured. Buyers continue to weigh long-term running costs, real-world range, charging convenience, and residual value before making the switch. It’s an evolution marked by steady strides rather than leaps.
The luxury EV market, meanwhile, is accelerating ahead at a very different pace. In the first five months of 2025 alone, luxury EV penetration hit 11%, riding on a base of approximately 50,000 units.
“From January to May this year, we have seen a 66% growth in the overall luxury car market, and Mercedes-Benz has grown 76% in the same period — much of this is driven by strong demand for electric models like the EQS SUV and the new G-Class with EQ technology. What’s encouraging is that this growth is coming without incentives or subsidies on the luxury end, purely on the back of product strength, price parity, and customer acceptance,” says Santosh Iyer, MD & CEO, Mercedes-Benz India.
Mercedes-Benz India led the charge with this staggering year-on-year growth in EV sales, outpacing even the segment’s scorching 66% rise. Models like the EQS SUV, EQE sedan, and the G-Class with EQ technology have turned into halo products for the brand’s electric ambitions, resonating with tech-forward buyers who value exclusivity and innovation.
One reason luxury EV adoption is outpacing the rest of the market is the favourable tax structure. While EVs generally carry a price premium globally, India’s flat 5% GST on electric vehicles, compared to as much as 48% on ICE-powered luxury cars, has flipped the equation.
“There’s nearly a Rs 1 crore price advantage between an EV and an equivalent ICE luxury model because of the 5% GST and other government benefits. That makes a compelling case for electric in the premium space. These advantages are passed directly to the customer, and that’s reflected in the kind of momentum we’re seeing,” Iyer adds.
According to industry executives, this difference alone can shave nearly Rs 1 crore off comparable configurations. BMW, for example, launched its new iX1 at Rs. 66.9 lakh, effectively matching the on-road price of its diesel-powered X1 sibling.
“BMW today sells as many EVs as it sells diesel cars — that’s not a forecast, that’s a fact. This shift has happened because we’ve ensured complete price parity between our electric and ICE offerings. Take the iX1 and the diesel X1 — they’re priced almost rupee for rupee the same on-road, and we’ve not compromised on features or performance,” notes Vikram Pawah, President, BMW Group India.
Volvo, staying true to its all-electric ambitions, is preparing to launch the EX30 by the end of 2025. With up to 474 km of certified range and local assembly under evaluation, the EX30 is designed to disrupt the premium EV entry space.
“We’ve seen the mass market move gradually — EV penetration has gone from 2% to 3% to 4%, and that’s good progress. But in the luxury space, it’s different. Our EV share is already at 25%, and we’ve seen it rise sharply this year with the XC40 Recharge and C40 Recharge. It’s a reflection of the type of buyer — multi-car households, urban professionals — who see electric not as a compromise, but as an upgrade,” says Jyoti Malhotra, Managing Director, Volvo Cars India.
“From a customer’s point of view, the acceptability — the ones who have bought these cars — by and large, have been very positive. The feedback has been encouraging, and usage patterns suggest customers are integrating EVs into their lifestyle quite smoothly,” adds Balbir Dhillon, Head of Audi India.
So, while India’s mainstream car buyers are increasingly warming up to electric mobility — bolstered by a growing model lineup and improving infrastructure — the luxury end of the market is already surging forward. Two markets, two different speeds. But the direction is unmistakably the same: electric, inevitable, and accelerating.
Buyers Built for Battery Power
Why does premium EV demand surge while the mass market still weighs its options? The answer lies not just in product strategy or pricing, but in the fundamental differences between customer profiles — their lifestyles, access to infrastructure, and their evolving relationship with technology and sustainability.
First, multi-car ownership is shared among luxury buyers. For them, the EV is not a single-point replacement but an addition, often becoming the daily city driver. At the same time, their internal combustion engine (ICE) vehicles are reserved for longer trips, outstation drives, or weekend getaways. This eliminates one of the most significant psychological and practical barriers for EVs: range anxiety. The question isn’t “can it do everything?” but “what’s the best tool for each job?”
“When people ask about range anxiety, we remind them: the average daily drive in India is just 40–42 km, whereas in Europe it’s 120 km. Our customers are mostly multi-car owners. They charge their EVs overnight at home or work, and the EV becomes their primary city car,” Pawah explains.
“This seamless integration into their lifestyle makes EVs a natural choice for urban mobility, and with ranges of 450–550 km, people have started to use these cars for intercity travel as well, with comfort improving by the day,” says Dhillon.
Second, urban driving patterns in India are naturally suited to EVs. The average daily commute in Indian metros hovers around 40 to 42 kilometers — a fraction of the 100+ km averages in markets like Europe or the US. Given that even entry-level premium EVs now offer 500 km of real-world range, charging is needed only once or twice a week, at most. This further eases any lingering apprehension about battery life or public charging availability.
“With 47% of India’s energy already coming from renewable sources, this is not just about owning an EV — it’s about driving a cleaner future,” Pawah adds.
Third, the infrastructure advantage is deeply skewed in favor of the premium consumer. Most high-net-worth individuals (HNIs) and ultra-HNIs (UHNWIs) live in gated communities, luxury high-rises, or own independent bungalows and commercial spaces — all of which typically come with private parking. In many cases, these residences are already equipped with or can easily accommodate a single Level 2 AC charging infrastructure. This means no queuing at public stations, no dependency on fragmented networks, and complete control over charging routines — a central friction point eliminated.
This customer base is not only large but also growing rapidly. As of 2024, India had 85,698 individuals with a net worth exceeding $10 million, according to Knight Frank — up 6% year-on-year, despite global macroeconomic headwinds. That number is expected to grow to over 93,700 by 2028, with millennials and Gen Z emerging as the fastest-growing contributor segments. These younger affluent buyers are not just digital natives — they’re also increasingly value-driven, placing a premium on environmentally sustainable, clean technology, and brand purpose.
“Luxury customers are looking for simplicity and sustainability. The government has been clear on its direction — stable GST and clarity on EV benefits, which helps. But what’s also driving adoption is the customer mindset. Younger people, especially Millennials, with disposable income — are far more conscious of the environment — about — and want their purchases to reflect that environmentally conscious — and reflect that,” Malhotra observes.
For them, the switch to electric isn’t just a rational upgrade — an upgrade — it’s a statement of intent. Driving an electric vehicle EV is as much about silent performance and cutting-edge technology as it is about projecting a future-forward, socially and environmentally conscious identity.
Together, these factors create a fertile ecosystem for premium EVs to flourish — one that the mass market is only just beginning to emulate. While mainstream buyers still approach EV adoption with — a — spreadsheet spreadsheets in hand, the luxury consumer mindset is already moving on to the following question: not “should I go electric?” but rather “which one best fits my lifestyle?”
Moreover, HNIs are multiplying fast. India counted 85,698 individuals with a net worth of $10 million or more in 2024, a 6% increase from the previous year; Knight Frank projects 93,700 or more by 2028, with millennials forming the fastest-growing cohort and citing sustainability as a key driver of luxury purchases.
Financing Turns Frictionless
Price parity is necessary, but affordable EMIs close the deal. Mercedes-Benz India, BMW Group India, and Volvo Cars India are accelerating luxury EV adoption in 2025 with innovative financing options tailored to affluent and aspirational buyers, capitalizing on the segment’s 11% EV penetration.
“There will be strong double-digit growth in EVs next year too, even if the overall luxury car market stays flat. The demand is not coming from just metros, but also from Tier 1 and Tier 2 cities, where customers are looking for a second or third car and choosing electric without hesitation,” Iyer projects.
Mercedes-Benz’s Wishbox and Star Agility+ Plan offer low EMIs for models like the EQS SUV, with guaranteed buyback values, flexible tenures, and tax benefits reducing EV prices by up to Rs. one crore, driving a 76% sales surge. BMW’s Guaranteed Future Value plan, used in 90% of EV deliveries like the i7, slashes EMIs by 40% and enables seamless upgrades.
“We’ve backed this with smart finance — 90% of our EV customers use our guaranteed future value programs, which can reduce monthly repayments by 30–40%. We’re confident about where this is heading. I believe we’re going to smash our own EV targets,” Pawah asserts.
Volvo’s financing supports a 25% share of EV sales and a projected 50% penetration by 2030.
“My personal view is that from today’s 8–10% EV share in luxury, we will easily cross 50% by 2030 — maybe even sooner, if we see more product launches in 2025 and 2026. For us, the differentiation in the future will come down to experience, not just price or specs,” Malhotra notes.
The expansion of the portfolio will further help the category, in tandem with financing options, to penetrate the market.
“None of our cars is below ₹1 crore. The starting price is ₹1.10–1.20 crore onwards, which limits our volume potential for now. As we have more cars, more models in different price points, the penetration will only improve,” notes Balbir Dhillon, Head of Audi India, highlighting the challenge of high price points until more accessible models are introduced.
Financing removes barriers and enhances loyalty across all three brands.
Powering Up the Premium Network
If luxury customers dislike queues at five-star hotels, they absolutely loathe them at charging stations. Convenience and exclusivity are non-negotiable at the end of the market — and EV ownership is no exception. Carmakers in the luxury segment have responded with a quietly fierce infrastructure arms race, building dedicated charging ecosystems designed to mirror the premium ownership experience: seamless, private, and fast.
Mercedes-Benz India is currently leading the charge. The company has established a robust network of 140 chargers nationwide, with 40 of them being ultra-fast DC units rated 180 kW or higher — powerful enough to charge models like the EQS from 10% to 80% in under 35 minutes. These stations aren’t restricted to Mercedes’ owners; through roaming partnerships and an integrated mobile app, the company gives access to an additional 150 fast chargers operated by third parties. This open-access model marks a significant shift: while the brand owns the infrastructure, it monetizes usage from rival EV owners, effectively turning infrastructure into a competitive advantage and a new revenue stream.
BMW India has adopted a slightly more curated approach. Its ChargeNow network, though smaller in footprint, focuses on concierge-level service. Spread across 50-plus strategic sites, it offers access via a single RFID card, app-based location tracking, and on-call customer support — creating a tightly controlled experience that mirrors the brand’s M-Town exclusivity ethos. BMW also bundles the first few years of charging access into ownership packages for EV buyers, further easing the transition.
Volvo Cars India, meanwhile, has opted for collaborative scale. Rather than building its standalone grid, Volvo is partnering with key energy providers, including Tata Power, Fortum, and BPCL eDrive, leveraging their fast-growing nationwide footprints. The goal is “plug-and-go” interoperability — ensuring that a Volvo EV driver can charge without fuss across various public networks using one account, one payment interface, and unified backend support. The strategy aligns with Volvo’s brand philosophy: clean, minimal, and fuss-free.
“To give you an example, in our own ecosystem, in my Audi application now, we have 6,500 chargers, up from a few hundred, including high-speed DC chargers, though adding infrastructure remains one of the biggest challenges today,” says Dhillon.
Parallelly, India’s public charging infrastructure is gaining critical mass. As of April 2025, the country had more than 25,000 public EV charging stations, nearly double the network size in 2023. In effect, the luxury EV ecosystem isn’t just about the car — it’s about controlling the entire experience: from plug point to payment, from app interface to uptime reliability. Charging is no longer an afterthought or external dependency; it’s part of the brand promise.
And for the luxury buyer, who expects speed, service, and zero friction, it’s not just about how far the car can go. It’s about how effortlessly it can get there.
The Looming Trade Wildcard
India is inching closer to sealing a Free Trade Agreement with the EU by late 2025. According to reports, negotiators closed five chapters in May, and Prime Minister Modi is pushing for a year-end conclusion. While expectations of sharply lower car prices may be misplaced — even with a deal, European EVs will likely continue to attract 10–15% import duty — automakers say the bigger impact will come in other forms.
The FTA could unlock a wider choice of premium EVs by easing regulatory hurdles, streamlining logistics, and encouraging global launches in India. In the longer term, it may also position India as an export hub for specific components or electric vehicle (EV) platforms, especially as localization deepens and trade flows stabilize.
For now, the agreement won’t bring dramatic price cuts. Still, it could quietly reshape the landscape, offering buyers more options and providing brands with greater flexibility in integrating India into their global EV supply chains.
Product Pipeline: The On-Deck Circle
The luxury EV menu will only widen:
| Brand | Next Launch (India) | What It Adds |
| Mercedes-Benz | EQE 500 4MATIC SUV | Mid-size option under EQS; 10-year battery warranty |
| BMW | i5 (sedan) in Q4 2025 | Business-class electric saloon to flank iX1 and i7 |
| Volvo | EX30 by Dec 2025 | Sub ₹50 lakh entry EV targeting younger buyers |
The 2030 Scoreboard
Luxury carmakers are optimistic about a bold yet increasingly realistic milestone: at least 50% of their India sales will be electric by 2030. Their optimism is grounded in stable policy support, with 5% GST and registration benefits making EVs significantly more accessible in the premium segment. Add to that a surge in wealth creation — with UBS and HSBC projecting that every second new millionaire in Asia this decade will be Indian — and the conditions for sustained luxury EV growth look firmly in place. These affluent, tech-savvy buyers are not only ready to switch but are actively seeking cleaner, high-tech mobility as part of their lifestyle identity.
The energy story adds further momentum. Nearly 47% of India’s installed power capacity now comes from non-fossil sources, giving brands a legitimate “green kilowatt” narrative to back their zero-emission claims. If overall passenger vehicle volumes grow to 7.5 million by 2030, a 50% luxury EV share could translate to 60,000–70,000 high-margin electric cars annually — small enough to sidestep scale-related bottlenecks but large enough to shape supplier strategies and justify deeper localisation. For global automakers, India’s 2030 scoreboard signals more than just compliance — it’s a high-potential, high-margin transformation opportunity.
The Bottom Line
India’s EV transformation will not happen all at once — it will trickle down from the top. Luxury buyers are acting as venture capitalists for the entire ecosystem, paying a premium (or at least not asking for a discount) and validating technology, while also funding private charging corridors long before mass-market economics make sense.
In the process, they are redrawing what “premium mobility” means: silent cabins powered b y green electrons, software-defined dashboards and ownership models built around guaranteed buybacks and hotel-like service lounges.
That’s why, even as mainstream adoption inches forward, the luxury lane is already cruising toward 2030 — one high-voltage, high-margin sale at a time.