India's Luxury EV Market Grows 66% as Premium Buyers Shift from ICE Cars

India’s wealthy are turning to electric vehicles, with luxury EV sales rising 66% between January and May 2025, according to VAHAN. The EV share in this segment climbed from 7% in the same period last year to 11%. Top players like Mercedes-Benz, BMW, and Audi are driving the trend through new launches and improving charging infrastructure.

Used Luxury EV Market Also Booms

Pre-owned luxury EVs are also gaining popularity. In 2025 so far, 19% of used luxury car sales were EVs—up sharply from under 5% last year—according to Luxury Cart. A key driver is the launch of new EV models catering to high-end buyers.

Model Launches and Manufacturing Boost Sentiment

BMW’s iX1, priced at ₹49 lakh, has become a market favourite. Mercedes-Benz has introduced several models, including the EQA, EQS, EQC and EQS SUV. Himanshu Arya, CEO of Luxury Cart, noted that broader model choices, improved driving range, and better charging facilities are building buyer confidence.

Jaguar Land Rover is setting up its largest facility outside the UK in Ranipet, Tamil Nadu, by early 2026 with a 30,000-unit annual capacity. Tesla is also gearing up for launch in India, expected to further accelerate interest.

EV Growth Supported by Policy and Buyer Mindset

As per news reports, Mercedes-Benz India MD & CEO Santosh Iyer shared, “The market is moving from ‘Why EV’ to ‘Which EV?’” He added, “I’ve been driving an EV for 2 years—I don’t miss ICE vehicles.”

Mercedes’ EV sales jumped 73% in the first five months of 2025. Iyer credited GST and road tax benefits, noting EVs in the luxury segment are 4–5% cheaper than ICE counterparts. “EVs are costly by nature. If not for tax breaks, many wouldn’t be keen to decarbonise,” he said.

He also pointed out that product variety is a key factor: “Luxury EVs offer more choices than mass-market ones, where ICE still dominates. Only 30% of Indian showrooms even have EVs.”

Despite this momentum, Mercedes-Benz will continue offering multiple fuel options. “We let the customer choose—be it petrol, diesel, hybrid or EV. As a responsible luxury OEM, it’s our duty,” Iyer concluded.

Also Read: Mahindra & Mahindra Ramps Up EV Production to 8,000 Units Monthly!

Conclusion

Luxury EVs are no longer niche in India—they’re becoming mainstream for the affluent. Backed by supportive policies, wider product choices, and expanding infrastructure, this shift signals a decisive move toward cleaner, future-ready mobility in the high-end segment.

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