Using its local expertise, Bajaj Auto will offer a more affordable alternative to startup Yulu against Chinese electric two-wheelers. It has started to develop single-seater, low-power electric scooters with a price tag of around Rs 30,000-35,000, a top official at Yulu said.
The Pune-based company had picked up stake worth $8 million in the electric mobility service provider in November last year. This is first time that the manufacturer of Pulsar and KTM bikes has invested in a startup.
Bengaluru-based Yulu imports electric scooter kits from China before assembling them in India.
Amit Gupta, co-founder and CEO, Yulu, said, “We are spending about $600 per bike. We are getting them manufactured in China and assemble them in India. With Bajaj Auto coming on board, we can bring down the price to $500 in the medium to long term. From over Rs 40,000, we can bring it down to Rs 30,000-35,000. Our product is customised for shared mobility.”
Yulu is targeting an inventory of 100,000 electric two-wheelers by December-end from 4,000 at present. Around $60 million (about Rs 400 crore) will be spent to purchase them. But the Bajaj Auto developed electric product for Yulu will hit the market only next year.
Yulu’s current scooters are powered by a 48 volt motor that powers the vehicle to a top speed of 25 km per hour. A full charge offers a max range of 60 km. No licence is required to ride a Yulu bike. The company charges Rs 10 per hour for every ride.
“We will continue to maintain the theme of the bike being simple to use and maintain. From an aesthetic point of view, our wish is that it should look far more beautiful and modern than what we have today. We want it to look appealing. Bajaj Auto is working on some renderings,” Gupta added.
Bajaj Auto’s first-ever electric product the scooter Chetak was launched in January in Pune and Bengaluru. Priced at Rs 1 lakh, Chetak is a high performance, premium category product, built on a platform that cannot support a product that would eventually cost less than one-third the price for Yulu.
“What we need is a single-seater, low speed and low weight vehicle. That is why all this will take some time for the transition to happen from China to India. It is difficult to provide an indicative launch date for the Bajaj-developed product, but we are hoping for something by next year,” Gupta added.
Bajaj Auto is one of the several investors of Yulu, which started operations two years ago. Blume Ventures, Wavemaker Partners and 3one4 Capital are its other inventors. Yulu also has the backing of entrepreneurs like Flipkart co-founder Binny Bansal and InMobi’s Naveen Tewari.
At present, Yulu is using debt and equity to fund its plans. In future, the company may look to raise funds via an equity stake sale.
“We need money to buy $60 million worth of vehicles. A large part of this capex is funded through debt. We will need additional equity because the market is showing appetite. Across five cities, we are looking at demand to run 200,000-300,000 vehicles. For the next 12 months, we are looking at four-to-five cities only,” Gupta added.