Foraying into the country’s fledgling electric vehicle space, Bajaj Auto is up for the first mover advantage in the segment with the electronic avatar of the iconic Chetak scooter. The scooter won’t be priced more than Rs 1.5 lakh.
Bajaj Auto returned to the scooter market with an electric avatar of the iconic Chetak after over a decade. The vehicle will go on sale in Pune and Bangalore early next year. Bajaj will gauge customer response and preparedness of the electric vehicle ecosystem before expanding operations to other locations Niti Aayog.
The company had last rolled out scooter Kristal in 2007.
Bajaj Auto managing director Rajiv Bajaj drew on the words of Alibaba founder Jack Ma to explain the company’s foray into the country’s fledgling electric vehicle space. He said if the company were to wait for the environment and the policy framework to be ready, it would lose out on the opportunity, the advantage a first mover would have in the segment.
“The biggest hurdle in electric vehicles in not the price, the charging infrastructure or range anxiety but the dilemma in the mind of the manufacturer…that it will sell the electric vehicle in place of something making money”, said Bajaj.
He added the company’s decision to enter the electric vehicle space with a scooter has enabled it to side-step the issue as it currently does not have any product in the category. Bajaj said the scooter will not be priced more than Rs 1.5 lakh. Bajaj said the company will burn money on sale of the vehicle, but the recent government measure reducing corporate tax will enable it to absorb the financial impact.
Broadly, as far as volumes are concerned, the company will continue to focus on its core motorcycles’ business, but will simultaneously work on developing “meaningful niches” with electric vehicles, electric three-wheelers and premium motorcycles under KTM, Triumph and Husqvarna brands, Bajaj said.
Interestingly, the launch of an electric scooter from the company has come within months of Bajaj opposing a proposal from government think tank Niti Aayog asking vehicle manufacturers to make only electric three-wheelers and two-wheelers in the country by 2023 and 2025 respectively.
The Chetak will be manufactured at Bajaj Auto’s manufacturing unit in Chakan, Maharashtra. The vehicle will deliver a range of 95 km in economy mode and 85 km in sports mode, the company said. The electric scooter will be retailed through the company’s Probiking outlets in India. It will be exported to relevant markets in Europe starting 2020.
Minister for road, transport and highways Nitin Gadkari said the transition to eco-friendly vehicles is inevitable and the local automobile industry must work towards making the country a hub for manufacturing electric vehicles. “We import fuel worth ?7 lakh crore every year. It is imperative we move towards electric vehicles which are both cost-effective and pollution-free”, said Gadkari.
Niti Aayog chief executive Officer Amitabh Kant, who was also present at the unveiling of the Chetak, said the cost of lithium-ion batteries have already come down to $176 per kWh from $1100 few years back.
“Battery costs will reduce further to $75 in the next three years and electric vehicles will cost at par with internal combustion engine (ICE) vehicles, total cost of ownership will be lower, consumers will go for it”, said Kant.
However, Gadkari clarified the government is not against the conventional vehicle industry and will leave it to the market to opt for better products and technology. Separately, Bajaj said the company will commence changing its portfolio to meet BS VI emission norms next month. He said he has been urging the government to reduce GST on two-wheelers as the increase in prices on account of the enhanced emission norms will be “detrimental” to the industry already in the midst of a prolonged slowdown.