Bajaj Auto may set up first electric vehicle plant in Akurdi

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Bajaj Auto’s headquarters in Akurdi, Pune, could start rolling out vehicles once again if the company decides to make electric two and three-wheelers from this plant. Akurdi, which housed Bajaj Auto’s first-ever manufacturing plant, last saw a product roll out in 2007.

Spread over 160 acres, the Akurdi plant currently houses Bajaj Auto’s research and development (R&D), corporate centre, and purchase and sales operations. A senior company official confirmed that Akurdi is the top contender to host the new plant, and that this would get confirmed in a couple of months.

Speaking to Moneycontrol, Rakesh Sharma, Executive Director, Bajaj Auto said, “There is a new plant for premium bikes, which is coming up. It will be our fourth plant. And for the fifth plant, one of the locations which is very attractive is Akurdi itself. We have 160 acres here. We could also look at Waluj, where we have a huge space. But we feel that Akurdi is a natural space.”

Fading out

After the birth of the Pulsar in 2001, which heralded the beginning for Bajaj Auto, scooters were gradually phased out from the company’s portfolio as motorcycles were made at the Chakan plant in Pune. Krystal was the last scooter made by Bajaj Auto from the Akurdi plant before a voluntary retirement scheme (VRS) was offered to workers affected by the shutdown.

“Work on the location of the new plant - like what layout we need, logistics and space requirements, vendor requirement, all that assessment is being done now. Once that work is complete, we will know what the investment required is in a month or two,” Sharma added.

EV ambitions

Bajaj Auto currently has only one electric vehicle, the Chetak, in its line-up. The company is working on an electric model under the Husqvarna brand as well as further additions under its own brand. The long-delayed electric three-wheeler, which will mark Bajaj Auto’s entry into the space, will likely debut in 2022.

In July 2021, Bajaj Auto decided to set up a wholly-owned subsidiary to tap growth opportunities in the electric and hybrid two-wheeler, three-wheeler and light four-wheeler categories. The name of the new subsidiary is yet to be finalised and subject to approval by the Ministry of Corporate Affairs (MCA).

The setting up of a new subsidiary comes amid accelerated participation by a number of start-ups and established companies in the EV space.

Start-ups such as Ola Electric, Ather Electric and Ampere Vehicles and established companies such as Hero Electric, Hero MotoCorp and TVS Motor Company are revving up their presence in the electric two-wheeler space.

Stake divestment

Pune-based Bajaj Auto is not averse to bringing in a partner for its 100 percent EV subsidiary. There have been a number of instances of consolidation within the EV industry over the last few years.

While Tata Motors sold an 11-15 percent stake to a TPG-led consortium, Greaves Cotton bought out Ampere Vehicles and Bestway Agencies. Ather Energy has had Hero MotoCorp as an investment partner for the last few years.

Asked if Bajaj Auto will tap partnership opportunities using the new subsidiary, Sharma said, “It all depends on how the market unfolds. If that is the best thing that is required at that point in time, we will do it."

"It is an option on the table. But the most important thing is to understand the speed at which this market is going to transition in two and three-wheelers and what it will take to succeed in that. Basis that, all the other decisions are consequential. There is no boundary that states we will never do this," he added.