Bajaj Auto Will Aggressively Compete In The EV Space, In India And Abroad

Bajaj Chetak

Bajaj Chetak in Red

‘Fundamental direction of EV sector’s evolution is unchanged, only the pace has been impacted by Covid-related interruptions’

Bajaj Auto’s electric scooter Chetak not only marked the company’s raid electric vehicles, but also the resuscitation of the famous Chetak scooter in its electric avatar and therefore the company’s comeback within the scooter segment after over 12 years. Launched amid much fanfare in January last year, its sales performance has been tepid. In an interview with BusinessLine, Rakesh Sharma, executive , Bajaj Auto, detailed the explanations for the Chetak’s low sales numbers also because of the company’s EV strategy. Excerpts:

The Chetak e-scooter was launched with tons of fanfare. But its sales performance has been tepid — FADA research says 1,243 units were sold in 2020. What reasons does one attribute to the same? What were the company’s expectations from Chetak?

Bajaj Chetak EV Sales Cross 1000
Bajaj Chetak EV Sales Crosses 1000

We launched Chetak e-Scooter with the limited objectives of signalling the entry of Bajaj Auto into the electrical mobility space also as of fixing a learning curve for ourselves. Hence, we had decided right from the initial stages that we might launch Chetak only in two cities — Bangalore and Pune. A marathon rally was flagged off in Delhi and 20 electric Chetaks successfully covered a 3,000-km journey from Delhi to Pune via Goa. This, along side the elegant design of the merchandise invoking the heritage of Chetak, captured the imagination of consumers leading to an impressive response.

However, our supply chain was overtaken by issues arising out of the outbreak of the Covid-19 pandemic in China. This impaired our ability to service demand. Hence, we ceased booking of Chetak within three months in an effort to not cause disappointment of an extended and unsure waiting period to an outsized number of consumers . Subsequently, the semiconductor shortage further aggravated supply chain issues delaying the servicing of consumers , reopening of bookings and expansion into more cities. Hence, the low sales numbers were mostly a self-imposed restraint for the explanations just described.

Bajaj Auto had to halt bookings for Chetak between March and April 2020 then again in September thanks to pandemic-related challenges. The bookings have restarted only now in April. What are the challenges that the corporation has been facing during this regard? Share with us your learnings from this experience.

Bajaj Chetak
Bajaj Chetak Mileage

We reopened the bookings in mid-April but have still not expanded out of Bangalore and Pune because though there are better supply chain availability, uncertainties still persist and that we don’t want to check in an outsized number of consumers without having far better assurance on the delivery horizon. However, as things get surer we would like to roll into other prominent demand centres progressively hoping to be in 24 cities by the top of this year. we’ll take a choice after careful observation of the availability flow over subsequent two-three months.

Our limited and early experience suggests that while the customer is certainly interested in the electrical proposition of smooth and convenient operations, style, performance, quality and a trusted brand also remain as vital factors driving the acquisition decision. Indeed the high initial costs of acquisition also are limiting the event of the category.

There are reports of the corporate starting work on localisation of component manufacturing for Chetak. How is that panning out? How would you describe Bajaj’s plans for localisation of its EVs at large?

There are multiple plans which include alternate supply bases and localisation within the realm of possibilities to mitigate the uncertainties to the utmost extent.

What quiet sales are you targeting for the Chetak this fiscal year also over subsequent few years?

We have not set a numeric sales objective or a market share aspiration — we’ve the limited twin objectives of commencing our electric journey and moving up the training curve within the category — and there are multiple curves here — the technology side, the seller side, the customer interface side, etc. We hope to maneuver up rapidly on all of those .

Bajaj Chetak
Someone riding Bajaj Chetak

How does one think the second wave of the pandemic will change things for the Indian auto sector’s plans within the EV market, also as for Bajaj Auto?

The pandemic is causing interruptions and delays also adding some management challenges. However, the elemental direction of the sector’s evolution is unchanged — perhaps only the pace has been impacted.

How would you describe Bajaj Auto’s EV strategy? How does one want Bajaj Auto to be positioned in India’s EV story? How would Bajaj be positioned differently, if at all, compared to other OEMs?

We will aggressively participate within the EV space, both in India and overseas markets. we’ll celebrate our engagement to be in step with the evolution of the industry with an effort to be at the forefront, leverage our R&D capability to deliver a differentiated combination of performance, style and customer connect, and work closely with partners to derive synergies and acceleration.

Bajaj Chetak EV
Bajaj Chetak EV Range

How many more EVs does one plan on rolling call at the mid to long term? Which all segments will they be in?

These plans are still being conceptualised and it’s premature to speak of them at this stage.

Do you intend all models of Bajaj Auto’s future line-up to possess an EV variant? And does one envisage a time when the line-up would be fully electric (similar to some OEMs’ plans)?

It is difficult to be precise about the event of the industry. While there’s a consensus about the inevitability of electrical driving mobility during a substantive way, it’s also a reality that currently its penetration percentage within the two-wheeler space is in low single digits.

What potential does one see for the electrical two-wheeler market? What are a number of the explanations why it’s still at a nascent stage?

The issue is just the high initial cost of acquisition. As that reduces, the EV penetration will increase.

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