Bajaj Auto is one of India’s biggest two and three wheeler manufacturers and now, one of India’s biggest e-scooter and e-three wheeler manufactures. However, though Bajaj might be a leader in the ICE (Internal Combustion Engine) category, being able to build cost-efficient and reliable electric uehicles is capital intensive and time intensive affair.
In January 2020, Bajaj Auto launched its first electric offering by bring back an old legend in electric form – the Chetak scooter. Since, company has followed it up with electric three-wheelers in May this year.
In an interview with ET, Rajiv Bajaj, MD at Bajaj Auto shared that the company will successfully be able to make the switch from ICE to EV in the time to come, irrespective of the uncertainties that present themselves.
Bajaj also mentioned that the profitability for both the EV – Chetak and the three-wheeler RE depend on broadly two factors. Firstly, the pricing power that rests on the depth of the EV’s brand position. Luckily, both the Chetak and RE are strong brands in terms of awareness as well as aspiration. Secondly, a competitive cost structure that will leverage the technology platform. Bajaj stated that both offerings enable the design and manufacturing investments to be productive. Thus, the company should achieve profitability at a relatively lower threshold.
Irrespective of the inflationary costs and currency crises, Bajaj Auto has continued to deliver 20 percent EBITDA (earnings before interest tax, depreciation and amortisation), Bajaj told ET.
Bajaj Auto currently has 80 percent market share in the ICE segment. This serves as a substantial and efficient distribution platform for their electric offerings. Furthermore, the MD of the company also said that the range and reliability that Bajaj’s RE offers, is driving the company towards e-three wheeler leadership in the market.
Bajaj is also working on a CNG (compressed natural gas) motorcycle. When it will be launched in 2025, it will be the world’s first CNG powered motorcycle.