Bajaj Auto, the fourth largest motorcycle maker in India, plans to set up a 100%-owned subsidiary to produce electric scooters and cars.
Bajaj Auto's board has approved of setting up a subsidiary for electric vehicles with legal capital of Rs 1 billion (US$13.4 million) but the establishment hasn't passed India's Ministry of Corporate Affairs, according to Economic Times and Electronics B2B.
Bajaj's executive board member said they are reviewing all kinds of possibilities for its EV business, including cars for low mileage and high-speed cars. The new subsidiary will manufacture electric two, three, four-wheelers and hybrid cars. To make electric four-wheeled cars will obviously be a breakthrough for the two and three-wheeler manufacturer.
Bajaj launched its first electric motorcycle Chetak in January 2020. Chetak will be more widely available in 25 cities in India by the end of this year, including Nagpur, Aurangabad, Mysore, and Mangalore.
Two-wheelers are generally more popular and useful than cars in India due to traffic congestion. Ola Electric is taking pre-orders for its electric scooters; the largest Indian scooter brand Hero MotoCorp has partnered up with Taiwan-based Gogoro for electric scooters. Other competitors in India's EV market include Ather Energy and Revolt, which already had available electric two-wheelers on the market.
According to IDBI Capital's report citing Bajaj Auto, it could take five years for electric two-wheelers to show significant growth, due to the price difference between electric and ICE vehicles.
Bajaj Auto will launch an electric tricycle by April 2022. However, Bajaj Auto is faced with growing competition from Chinese two-wheeler makers in Western Africa where Bajaj has over 50% of the market share.
Two-wheeler makers in India for FY2021 (%)
Source: Statista Compiled by Digitimes July 2021
