'Sustainability for us is not just a buzzword, it’s a full-time commitment': Santosh Iyer
Santosh Iyer the MD and CEO of Mercedes-Benz India says that the company is witnessing growing adoption of EVs, and the change is being driven by the youth.
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Mercedes-Benz India, which organised the media drive of its latest all-electric EQE SUV in the picturesque setting of Gulmarg near Srinagar in September, intends to drive home the point of Electric Vehicles addressing the problem of local pollution in such sensitive ecozones. The luxury carmaker's MD and CEO, Santosh Iyer says that it is committed to sustainability wholeheartedly, rather than considering it as a mere buzzword.
How is the customer mindset changing towards EVs?
There are two sets of customers — the first one who comes specifically looking for an EV after having already made the decision to buy an electric car. And out of our existing four or five percent EV penetration in our total volumes, around 50 percent of the customers belong to this category of buyers. The other set is the one which is still shopping around between ICE and EVs, and they have several open questions, starting with the life of the car, life of the battery pack, and the availability of charging infrastructure.
These apprehensions usually arise from their comparisons of an EV with a smartphone or an electronic device, which generally have a limited life. We take measures such as offering a guaranteed residual value on EVs same as our ICE models, as well as conducting recces at their residence and office locations for setting up chargers, alongside sharing the availability of the fast-charging network on our consumer application. While these steps help alleviate their concerns and encourage customers to take the step of moving towards buying an EV, the result is still a small percentage (around 20-30 percent conversion) of all such buyers.
What we are observing is that the change is usually being driven by the younger generation, which is more conscious towards the environment and such people are mindful of their carbon footprint. I think the idea of sustainability is not yet fully ingrained in the minds of the older buyers, and it would require a significant shift in the rationale for them to be able to take the pains and make the switch to an EV. We are extremely hopeful that the situation will improve as more products and better charging infrastructure become available in the future.
What is Mercedes-Benz India's larger vision around sustainability and what is your roadmap?
Sustainability for us is not just a buzzword, it is a commitment. Globally, as Mercedes-Benz, we have already declared our intent of becoming the first automotive company to become carbon neutral by 2039, and India is an integral part of this vision. Since the last two years, our manufacturing facility in Chakan, Pune has been running on green energy, and this year, one-third of our retail network will switch to solar power.
There is a lot happening on the supply chain front as well, with our parts packaging moving away from plastics to sustainable materials. We are doing measurements across different operational areas and evaluating how to move from the current environmental impact to the final goal of net-zero.
On the product front, our EVs are not just electrified-ICE models. Instead, they conform to the larger thought of sustainability, and are built using sustainable and recyclable materials, as sustainability is not about tailpipe emissions alone. We are attaining 95 percent recyclability on the car itself; the batteries themselves are up to 96 percent recyclable. Therefore, we are ensuring that these products become part of a circular economy, and as a responsible OEM, we are aiming for that. There is a clear focus on sustainability, and we consider it our responsibility to hand over a cleaner planet to the future generations.
Is Mercedes-Benz India augmenting its efforts to strengthen the EV charging infrastructure?
I think charging infrastructure is our responsibility as well, and we need to grow the ecosystem. While there are very good private players in India of the likes of ChargePoint, Zeon, Tata Power, which are doing phenomenal work, at the same time, as OEMs we must strengthen our efforts as well.
In this regard, we have opened up our existing charging network which is a combination of 22kW AC and up to 180kW DC fast chargers and democratised it across brands so that any car can take advantage of our infrastructure. Similarly, we have also given access to 200kW DC fast chargers which are marked on our application but are part of a different ecosystem.
I believe this space is evolving rapidly and today, most of the use cases such as Delhi-Chandigarh, Delhi-Jaipur, Mumbai-Pune, or Mumbai-Goa, are already well equipped. Having said that, a lot needs to be done, and I am hopeful that with more products coming in, more OEMs will invest in this space.
As Mercedes-Benz India, we are identifying white spots, particularly on inter-city routes, and are investing in equipping them with fast chargers. Presently, we have around 40 such fast chargers (160-180kW) across key locations in India, and an EQE, for instance, can be topped up to 80 percent State of Charge within 20 minutes by using any of these points. It is a matter of time; as we see more EVs on roads, and people starting to travel long distances in them, this ecosystem will strengthen further.
How well is the Mercedes-Benz India ecosystem equipped to service EVs?
In the first phase, while we trained our after-sales workforce to work on high-voltage cars and made them competent to diagnose and troubleshoot issues by part replacement, we have now kicked off the second phase of training, wherein our technicians will be able to work on the child parts of an EV.
It is a much more complex process, particularly, in a live-charge environment, and we have started this training for all our network partners across India. Moreover, we also have tie-ups with engineering colleges across India for a Diploma in Advanced Automotive Mechatronics, wherein we have included EV repair methodologies as part of the curriculum. Every year, we have around 200 technicians graduating with this course, and these people become available to the larger ecosystem, beyond the Mercedes-Benz network. Our road-side assistance technicians are also competent to diagnose and solve possible issues with EVs. With respect to the batteries, while they are generally reliable, we do not plan to repair them as it makes more sense to replace them, if need be, in the current setup.
How is the battery going to determine the dynamics of an EV's residual value in the long run?
The battery life on Mercedes-Benz EVs goes beyond 10 years, and the standard 10-year battery warranty is our confidence in the technology. These batteries are meant to handle lakhs of charge-discharge cycles and can survive up to 15-20 years. Beyond this, while one would scrap an ICE vehicle, in EVs, the battery pack can still offer a good buyback price for its capacity to be still used for secondary-life storage applications.
Furthermore, even if the battery is deemed unfit for secondary-life applications at the end of 10 years, the current technology allows us to recycle up to 96 percent of the constituent materials, including rare-earth metals like cobalt and nickel. Therefore, the residual content of an EV is much higher than an ICE car, and the commercial value of the battery is still significant at the end of the vehicle's lifecycle. Awareness and more usage are going to bust these myths around the life of an EV's battery as the market matures further.
This interview was first published in Autocar Professional's October 15, 2023 issue.
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