Mercedes India Is Right: Delhi's Rs 30 Lakh EV Cap Punishes Premium Buyers
Mercedes-Benz India has publicly warned that Delhi's revised EV policy, which restricts incentives to cars priced under Rs 30 lakh, could stall premium EV adoption just as the segment finds momentum. The caution comes as the CLA electric sedan lifts the brand's EV penetration to around 14 per cent.
What was announced
Speaking to ETAuto on 7 July 2026, Mercedes-Benz India MD and CEO Santosh Iyer said Delhi's revised electric vehicle policy risks unintentionally slowing EV adoption at the top of the market by capping purchase incentives at cars priced below Rs 30 lakh. The concern, he argued, is that comparable ICE luxury models become relatively more attractive once the incentive advantage is withdrawn from premium EVs.
A Rs 30 lakh cap made sense when EVs meant Tigors and Nexons; it makes none when a Rs 60 lakh CLA is actively converting diesel luxury buyers.
Iyer disclosed that Mercedes-Benz India's EV penetration has climbed to around 14 per cent, up from the earlier 8 to 10 per cent band. He credited the all-electric CLA sedan, priced at around Rs 60 lakh, as the single biggest contributor to that jump, saying it has meaningfully expanded the brand's EV customer base rather than cannibalising existing ICE demand. "The success of the CLA clearly shows that our customers prefer value over price," he told ETAuto.
The comments came alongside Mercedes-Benz India reporting its best-ever first-half sales performance, with the CLA electric described as the standout demand driver. The Delhi policy in question retains subsidies, road tax waivers and registration benefits for EVs under Rs 30 lakh, but excludes higher-priced models, effectively ring-fencing support for mass-market and mid-premium electrics while leaving luxury EVs to compete against ICE rivals on sticker price alone.
The Car Jury verdict
Mercedes is right to push back. A Rs 30 lakh cap is a hangover from an era when EVs meant Nexons and Tigors, not a Rs 60 lakh CLA that is genuinely converting luxury ICE buyers. Cut the incentive at the top and the maths tips back toward a GLC or E-Class diesel, which is exactly the opposite of what Delhi's air needs. Rachit Hirani of MotorOctane summed up the current market chaos bluntly, noting that brands are now launching "EV with ICE" side by side, and buyers in this bracket are cross-shopping powertrains hard. Gagan Choudhary echoed it, saying customers with Rs 50-60 lakh budgets "struggle a lot" and stay undecided till the last moment. Remove the EV nudge and that undecided buyer walks into a GLC showroom, not a CLA one. Policy needs a slab, not a ceiling.
