Bajaj Auto is grabbing incremental share of the electric two wheeler (e2w) market rather aggressively, even as competitors continue to provide tough competition. One look at the data for July this year versus the same month last year shows that Bajaj has more than quadrupled sales of the electric Chetak in these 12 months and is now neck and neck with TVS Motor Company in the market share race. Last month, Bajaj had over 16% share of the market versus TVS’ 18% and Executive Director Rakesh Sharma believes this performance would be vastly improved in the coming months, thanks to the launch of the sub one-lakh Chetak 2901 recently.Bajaj’s aggression comes from the Chetak 2901, its first sub one lakh rupees product, and the continued emphasis on expanding the distribution network for e2w. The sub one lakh rupees segment accounts for nearly 50% of the e2w market and till now, Bajaj had no presence in it.
Sharma said recently that the new Chetak 2901 will help Bajaj Auto address this particular segment while also allowing the company to widen its distribution reach. “We were at 250 stores in June but by the end of July we had reached nearly 500 stores and we will open 1000 stores by September. Our Q1 FY 25 (April-June) market share was 12% but it should be noted that we were at 20% share in the above one lakh rupees segment and almost nil in the sub one lakh rupees segment. Hence, play in the sub one lakh rupees segment and in new geographies should lift Chetak business significantly, Sharma said.
Chetak 2901 is priced between INR 96000-100000 and a surge in bookings for this model is believed to have taken overall Chetak bookings in July past the 20,000 unit mark.
Not only Bajaj, market leader Ola, TVS and some other OEMs have also launched products in the sub one lakh rupees segment over the last few months, eyeing budget conscious consumers who do not mind lesser features as long as the product becomes more affordable. Ather has launched the Rizta – a family scooter which is priced just above the INR one lakh mark. Ola meanwhile has dropped prices on the SX1 series so that the lineup starts well below the one lakh rupees psychological barrier.
Incumbents rule:
Data from the vahan portal shows that incumbent two wheeler giants TVS and Bajaj together held nearly 35% of the e2w market in July this year or more than a third. Only Ola Electric is ahead of their combined power at nearly 39% market share. Pure play electric company Ather has lost its grip on the market somewhat, falling to single digit share of 9.4% this July versus over 12% in the same month last year. Every other e2w OEM remains in low single digits. Even TVS has loosened its grip of the market a bit, falling from over 19% to about 18% market share in the 12 months till July 2024.
The significant gains made by Bajaj and the continued firm grip of Ola and TVS over the e2w market in July 2024 came even as the overall market nearly doubled, from 54,616 units in July 2023 to 106,949 units sold last month.
Subsidy games:
The e2w market has nearly doubled in 12 months despite the purchase subsidy being given by the government having gradually shrunk and the looming uncertainty over its continuation. From nearly 40% of the vehicle cost, the subsidy is already down to about 10-15% of the vehicle cost. Meanwhile, the government has extended the Electric Vehicle Promotion Scheme (EMPS), which was slated to end by July 31, by another two months.
This scheme was introduced as a short term arrangement, between April one and July 31, to continue the subsidy regime till a decision was taken on whether to bring a third edition of the original subsidy scheme called FAME. Faster Adoption and Manufacturing of Electric and Hybrid Vehicles ended last fiscal and with no clarity on FAME III, EMPS has now been extended till September 30. EMPS will now also have a nearly 50% increase in corpus.
As the subsidy back and forth has continued, fortunes of erstwhile e2w market leaders have swung widely, with Hero Electric, Okinawa and some others now selling less than 500 e2w a month. These companies had faced allegations of subsidy misappropriation and subsequent demand notices from the government, which eventually led the to face working capital woes and eventual shrinking of operations.
