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Informist, Friday, Dec. 20, 2024

 

By Anand JC and Darshan Nakhwa

 

PUNE – Bajaj Auto Ltd.'s electric two-wheeler business has become profitable nearly five years after the launch of its first product, the company's Executive Director Rakesh Sharma said Friday. "We are not losing money (on Chetak). With the new launch, we are now profitable," said Sharma at a media roundtable on the sidelines of the launch of Chetak '35 Series'.

 

The Pune-based two-wheeler company launched the three variants of the '35 Series' e-scooter, starting at INR 120,000 ex-showroom Bengaluru. The company plans to export Chetak for the first time with this series, starting in 2025-26 (Apr-Mar). "We are planning to export the Chetak in a dozen markets in different continents as we planned to do it for the '35 Series'," Sharma said without giving details of the countries. Bajaj Auto has invested over INR 30 billion in developing the new Chetak line-up, Sharma said.

 

Bajaj Auto sold 174,909 e-scooters in Jan-Nov, up nearly threefold from 61,518 units in the same period last year, as per Vahan data. Around 25% of Bajaj Auto's domestic revenue now comes from the electric scooter business and 40% from green energy-run units, including electric and compressed natural gas.

 

CNG CHETAK?

Asked if the company will launch a CNG Chetak, Sharma said the product wouldn't make a great proposition economically. "When we started looking at CNG, we evaluated both formats, but we decided we should try with the motorcycle format first," Sharma told Informist. Bajaj Auto launched its CNG motorcycle 'Freedom 125' earlier this year.

 

The gap in expenditure between fuel-run scooters and e-scooters is big, Sharma said. The average consumer riding Honda Activa's petrol variant spends INR 2.5 per kilometre, 35 paise on the Chetak, and 90 paise per kilometre on a CNG motorcycle. Mathematically speaking, if Indian consumers drive 20 kilometres on a CNG two-wheeler, they will save INR 500-600. "But if you are riding over 50 kilometres, you are saving a lot more, say more than INR 1,000. Now, longer distance happens more in motorcycles," Sharma said.

 

The company said it has ramped up production of Freedom 125 and is looking at ramping-up retails. "We are selling 10,000 units of Freedom 125 per month. It's a new category, we are in it for the long term," Sharma said.

 

MULTI-FUEL FUTURE

Bajaj Auto does not see fuel-run vehicles going away any time in the near future but sees a space for a multi-fuel world. "Look at our three-wheeler dealership today – LPG (Liquefied Petroleum Gas), diesel, petrol, CNG, electric, all are functional. Ethanol and CBG (compressed biogas) are about to come," Sharma said.

 

He said the Indian market is quite sensitive but also diverse in terms of use cases. "When the CNG price was raised to INR 90 per kilogram, there was reverse migration to diesel from CNG in three-wheelers in that market," he said.

 

Many factors including availability of charging infrastructure, average driving distances and availability of government subsidies are leading to multiple use cases, Sharma said. Brushing aside claims of those calling for an end to vehicles with internal combustion engines, Sharma said there will be "multiple fuel options giving multiple solutions to the multiple requirements and use-cases for a country as diverse as India."

 

GROWTH RATE

The central government, as part of the Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement scheme, has reduced the subsidies offered to two-wheelers. This along with the high base of the previous year has impacted the growth of electric two-wheelers, Sharma said

 

The volumes of Chetak e-scooters sold in recent years have gone up, Sharma said. He said one must look at the growth rate of electric two-wheelers in consonance with the growth rate of internal combustion engine variants. 

 

Retail sales growth of Chetak e-scooters in Apr-Nov has been 35% on year, Sharma said. "Penetration of e-scooters has increased. We saw a switch to e-scooters particularly after petrol prices in India crossed INR 100 per litre. This switch was due to public anger," Sharma said.

 

Bajaj Auto in January renamed Chetak Technology Ltd. as Bajaj Auto Technology Ltd. The arm is now focused on electric and futuristic technologies catering to both electric and fuel-run portfolios. In 2019, the company set up Chetak Technology to handle marketing and other operations related to the Chetak line-up. However, Chetak Technology was renamed as some operations it was supposed to undertake, including marketing, sales, production, and purchases are similar to the operations of Bajaj Auto's existing team which handles fuel-run vehicles, Sharma said.

 

On Friday, shares of Bajaj Auto closed at INR 8787.25 on the National Stock Exchange, down 2.2% from the previous close.  End

 

Edited by Saji George Titus

 

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