Mercedes-Benz India will take a selective approach to introducing plug-in hybrid vehicles and does not plan to extend the technology across its entire portfolio, as the additional cost may be difficult to recover in smaller vehicle segments.
The luxury-car maker will evaluate plug-in hybrids on a model-by-model basis. The decision will depend on whether the company can absorb the additional cost or customers are willing to pay a premium for the technology, Managing Director and CEO Santosh Iyer said.
“The thing with hybrids is that they are expensive technology because of the multiple things and the cost that gets added to the vehicle,” Iyer told Autocar Professional.
He said the company had been able to manage the additional cost in a high-end product such as the S-Class. However, the same approach may not work in smaller and more price-sensitive segments.
“We have seen that many times customers are ready to pay, but not a significant premium, whereas the technology is quite expensive,” he said.
Mercedes-Benz will introduce a plug-in hybrid in another segment only after it is confident that the product has a clear business case.
“Only if we get confidence that the customer will pay, then it makes sense to get a plug-in. Else, it makes sense to remain with electric and combustion engines,” Iyer said.
S-Class To Remain PHEV-Only This Year
The comments come as Mercedes-Benz launched its first-ever Plug-In-Hybrid in the flagship S-Class–the S 450e Launch Edition.
The new S-Class will be offered in two configurations, the Launch Edition Exclusive Line and the Manufaktur Edition AMG Line. The have been priced between ₹2.20 crore and ₹2.38 crore, ex-showroom. Both variants will be imported into India as completely built units.
Bookings have opened across the company’s dealerships, with deliveries scheduled to begin in the fourth quarter. Mercedes-Benz is aiming to start customer deliveries around Diwali.
The S 450 e pairs a 3.0-litre, six-cylinder petrol engine with a 120kW electric motor. The system produces a combined 320kW of power and 680Nm of torque.
Its 22kWh battery offers a claimed electric-only range of up to 115km. The model also supports 60kW DC fast charging, allowing the battery to be charged from 10% to 80% in about 20 minutes.
Mercedes-Benz will offer only the plug-in-hybrid S-Class in India during 2026. “With the S-Class, it is 100% PHEV. We are not offering any option at all, at least for this year,” Iyer said. “Next year, when we localise, we may offer a normal combustion engine as well. But right now, it is 100% plug-in,” he added.
PHEVs Aimed At Existing ICE Buyers
Mercedes-Benz sees plug-in hybrids as a possible transition option for customers who continue to prefer combustion-engine vehicles but want to experience electric driving.
Iyer said battery-electric vehicles account for about 20% of the company’s top-end vehicle portfolio. The remaining 80% of customers in the segment continue to opt for internal-combustion-engine vehicles.
“If you want to address that combustion-engine population with an electrified powertrain, I think plug-in hybrid is a much better solution for those customers,” he said. “It gives them a chance to live with an EV,” he added.
A plug-in hybrid can be driven in electric mode for shorter urban journeys while retaining the petrol engine for longer distances. This reduces dependence on public charging infrastructure and addresses concerns around range.
However, Mercedes-Benz does not plan to set fixed targets for the share of petrol, diesel, electric or plug-in-hybrid vehicles in its India sales.
“It is not like we have a strategy to say that X% should be EV, Y% plug-in, and Z% petrol or diesel,” Iyer said.
The company has flexible production and supply-chain systems and will respond to how customer demand develops, he added.
Multiple Powertrains Across Portfolio
Mercedes-Benz India’s portfolio currently spans petrol, diesel, mild-hybrid, plug-in-hybrid and battery-electric vehicles.
Petrol and diesel remain available across several core sedans and SUVs. Mild-hybrid systems are used in models including the GLE and GLS.
Its battery-electric range extends from newer products such as the CLA to top-end models such as the EQS, EQS SUV, Mercedes-Maybach EQS SUV and electric G-Class. Plug-in hybrids, however, remain concentrated in select high-end and performance models.
Iyer said the potential of a powertrain could not be assessed separately from the vehicle carrying it. “Potential is never based on powertrain. It is based on the car type and the segments that we operate,” he said.
Going ahead, Mercedes-Benz plans to retain a broad mix of powertrains while customers remain divided in their preferences.
“It is more expensive because we are selling the same number of cars but with multiple powertrains. There is definitely cost getting added to our portfolio,” he added.
Despite the near-term multi-powertrain strategy, Iyer said the company’s long-term goal remained zero tailpipe emissions.
The transition could include hybrids and plug-in hybrids, but not necessarily in every segment. “Is the path going to go via hybrids and PHEVs? The answer is yes. Across categories, maybe no,” he said. “It depends on the product and what compelling proposition you are able to give.”