BMW and Mercedes Split on Hybrids as India EV Sales Surge

Mercedes sees the same 80% of customers who still buy combustion engines and draws a different lesson. Santosh Iyer, managing director and CEO of Mercedes India, said range anxiety and charging infrastructure gaps remain real barriers. “From a bridging perspective, the core reason for their purchases is the anxiety related to range, availability of charging infrastructure at times, and also the leap of need to shift into electric. So hybrid to these customers forms a perfect bridge,” Iyer said.

Mercedes introduced India's first plug-in hybrid in June. BMW has no announced plans for a hybrid powertrain in the country.

The strategic split mirrors a broader debate in India's passenger vehicle market. Domestic manufacturers Tata Motors and Mahindra & Mahindra are pushing pure EVs, while Japanese carmakers Toyota and Maruti Suzuki argue for hybrid promotion. Bernstein analysts, in a June 15 note, projected that strong hybrids will scale from about 2.3% of passenger vehicles today to 7-8% by 2030, driven by a near-doubling of the model catalogue by fiscal 2028. They flagged the 40% GST wall and improving battery-EV economics as real risks.

Subhabrata Sengupta, a partner at Avalon Consulting, said the right choice depends on use case. “If people are looking at luxury tourers, a hybrid is a good option. If running is urban, EV makes more sense than a hybrid. If it is mixed use, a hybrid makes sense,” he said.

Mercedes has held the top spot in India's luxury market for about a decade. It is focusing on ultra-premium cars to boost profits, though sales in that segment have recently softened. BMW is closing the gap with aggressive pricing. The hybrid question is now the most visible fault line between them.