Bajaj Auto will step on the pedal to ramp up production and market reach of its sole electric two-wheeler Chetak over the next few months as it gears up to introduce new derivatives of the model amid segment demand stagnation.
The Pune-based company will be increasing production of the Chetak by more than 40% to 10,000 units per month in the December quarter and increase it further in the ensuing quarters, a top Bajaj Auto executive said in a post earnings call.
As of September, the company’s production rate stood at around 7,000 units, making it the fourth largest brand in the electric two-wheeler manufacturer in India.
Rakesh Sharma, executive director, Bajaj Auto said, “Supply chain work has increased our capacity and reduced costs, allowing us to open up the network, right price the product and drive sales (of the Chetak).”
Chetak’s market share at the retail level has jumped to 11% by end of September from 4% clocked by the end in FY23. It may rise further given that around three more launches are planned over the next one year.
“New (Chetak) launches will start from November (post festive) and something towards the fourth quarter and then in the first quarter and the second quarter,” Sharma added.
From 120 cities, the reach of the Chetak is planned to be increased to 180 cities by the end of FY24. The brand has 140 exclusive sales and service stores, which Bajaj claims, covers almost 75% of the high-speed EV market.
Priced at Rs 127,000 (ex-showroom, Delhi) the Chetak is priced lower than competition such as the TVS iQube and Ather 450. A couple of models of Ola Electric, the market leader, are priced below the Chetak. These models continue to get subsidies under the Faster Adoption and Manufacturing of Electric and Hybrid (FAME) 2 scheme.
“We are only hoping that FAME does not play a spoiler and retard the penetration rate which has stagnated,” Sharma added.
The Centre abruptly reduced the subsidy offered under the FAME 2 scheme starting June 1. From 40% incentive cap, the subsidy was reduced to 15% in addition to capping of the subsidy to Rs 10,000 per kWh of battery.
This change led to dramatic correction in the retail volumes of electric two-wheelers in June falling to 46,000, down 30% compared to earlier months. While the volumes are back to the 63,000 units a month levels, as seen by the end of September, market players are claiming stagnation of demand.