After gaining a foothold in the electric two-wheeler (E2W) segment with its Chetak e-scooters, Bajaj Auto Ltd is drawing up a blueprint for its electric three-wheeler (E3W) business.
The Pune-based automaker plans to invest Rs 500 crore in the electric vehicle (EV) segment, of which the lion’s share will be deployed in building capacity for its E3Ws, a top company official said.
Bajaj Auto is the market leader in the traditional three-wheeler market and initially planned to launch E3Ws in 2019. The plan was later postponed to the previous financial year due to Covid.
“We are putting out close to Rs 500 crore on the capex for this (financial) year. This is because the launch of the electric three-wheeler vehicle planned for the weeks ahead will lead to capex and infra creation,” chief financial officer Dinesh Thapar said during an earnings media interaction. “A large part of capex that we do on the EV business will be behind three-wheeler EVs.”
The company’s E3Ws will be introduced soon in both the passenger and cargo categories in select locations in the first phase. Bajaj Auto told Moneycontrol earlier it is “readying dealerships” and “training manpower” for its E3Ws.
Bajaj Auto’s entry in the E3W business comes as Piaggio India, Mahindra & Mahindra, Omega Seiki Mobility and Euler Motors expand in this space.
Asked whether the Level 5 E3Ws will cut into the share of its traditional three-wheelers that use fossil fuels, Thapar said the E3Ws will be introduced in a phased manner. He said the use cases for electric two- and three-wheelers are different and opportunities for E3Ws will be driven by certain geographies where there may be restrictions on traditional vehicles.
In auto industry parlance, the Level 5 (or L5) category of E3Ws is a segment above electric autorickshaws or electric carts (L3 category). While close to 25,000 units of such E3Ws were retailed last year, about 14,000 units have been registered so far in 2023, according to government data.
Bajaj Auto has outlined a total outlay of Rs 700-750 crore for FY24 compared with Rs 1,000 crore spent during FY23.
“We are expanding capacity on the supply of EV components relative to our scale. We are doing about 3,000-3,500 units (of Chetak e-scooter) per month, which is not enough to meet demand. We are ramping up to debottleneck capacity on EV components. A fair amount of that has happened and a lot of that is currently underway to reach levels upwards of 10,000,” Thapar added.
He said Bajaj Auto invested mainly in creating enablers for the Chetak business in the previous financial year, augmenting R&D capabilities, and establishing dedicated dealerships.
Bajaj Auto reaffirmed that its EV subsidiary has applied for the government’s production-linked incentive schemes
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