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Customer response to the electric variant of Chetak will help us devise strategy for EV segment: Bajaj Auto

Nandana James | Updated on January 15, 2020 Published on January 15, 2020

Rajiv Bajaj (right), MD, Bajaj Auto, and Rakesh Sharma, ED, showcasing the Chetak electric scooter in Mumbai   -  PAUL NORONHA

According to Rakesh Sharma, ED, availability of charging infrastructure was a big challenge for the EV category

Bajaj Auto, which forayed into the electric vehicle category with the Chetak, will be resorting to “intensely observing” how customers respond to the category, and once it gets a hold on the customer behaviour after a couple of months, will move on to devising a strategy for it, said Rakesh Sharma, Executive Director, Bajaj Auto.

Bajaj Auto became the first mainstream internal combustion engine player to launch its own electric scooter on Tuesday, at an ex-showroom price starting at ₹1,00,000. The Chetak was unveiled a few months ago.

Talking to BusinessLine on the sidelines of the Chetak’s launch, Sharma said that based on the company’s expertise with motorcycles, it drew assumptions on various aspects of its foray into the EV category. For instance, it decided to opt for a premium model as the company felt that there will be more adopters for an electric scooter among the premium end of customers.

In the next few months, these assumptions will get validated, in terms of who the buyers are, the reasons underpinning their decisions, as well as clarity on why people who are not buying aren’t buying, he explained.

This is why it was very important that the company did not follow a set method or rigid way of going about its strategy for the Chetak, said Sharma. This is a new segment of customers and Bajaj Auto will be resorting to a “period of intense observation” now, to gauge the customer’s response and then devise strategies, he said.

Plans for Chetak

After this period of intense observation on how the Chetak performs in Pune and Bangalore - the only cities where it is currently being launched - Bajaj Auto will start opening it up to more cities. Since the company’s KTM dealerships are spread across more than 300 cities, spreading to other cities going forward will not be an issue, said Sharma. The Chetak will be sold through KTM dealerships.

The product will be available in 13 and four dealerships in Bengaluru and Pune, respectively, for now.

On where he sees Bajaj Auto in the EV space in a couple of years, Sharma said: “We have entered the EV space with the objective of winning in it. So certainly we would like to be at a leadership position. I don’t know where the EV space is going to (head). We made the move, but yes, ...we have a belief that the EV will become a real category. It’s not going to blow over, it is here to stay. It will be a little bit of an up and down...but we are willing to go in the up and down route. We will certainly be at the leadership.”

The Chetak, which is the company’s resuscitated scooter model in its electric avatar, is available in two variants, Urbane and Premium. The Chetak Urbane edition will be priced at ₹1 lakh, while the Chetak Premium edition with luxury finish will be priced at ₹1.15 lakh.

Charging infrastructure, a challenge

Sharma identified the charging infrastructure facing EVs as the biggest challenge, even more than pricing. This is where the government can play a good role, he said, adding that he sees a “glimmer of hope” in the Delhi government’s policy towards EVs.

Mandating charging bays and systems will be central to helping the EV category grow, he said. Once the government starts mandating charging stations, this will prompt other entrepreneurs also to participate in the charging infrastructure business, he added.

As for the pricing, Sharma said that with the increased prices due to the impending BS-6 transition and other factors, the starting ex-showroom price of ₹1,00,000 for an electric scooter is not very expensive. Though the upfront price of an electric scooter will be high, over 12-18 months of ownership, customers will benefit from the cost recovery owing to the reduced operating cost, he pointed out.

Published on January 15, 2020
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