The name of the new subsidiary is yet to be finalised and subject to approval by the Ministry of Corporate Affairs
Automaker Bajaj Auto will set up a separate subsidiary to expand into the electric and hybrid vehicle space, as the sector witnesses exponential growth globally.
The proposed authorised capital of the 100 per cent subsidiary company will be Rs 100 crore and the paid-up capital being proposed is Rs 5 crore.
Speaking at the annual general meeting (AMG), Rakesh Sharma, executive director, Bajaj Auto said, “We are evaluating the full spectrum of possibilities in micro-mobility to performance motorcycles on the electric platform. Today the board of directors have approved the formation of a 100 per cent subsidiary purely to build the electric vehicle (EV) business. We view the future of the development of EV industry as an opportunity and not as a threat.”
The name of the new subsidiary is yet to be finalised and subject to approval by the Ministry of Corporate Affairs.
Bajaj Auto’s presence in the EV space is through the Chetak, a fully electric scooter that was launched in January 2020 but only in Pune and Bengaluru. Since then the Pune-based company expanded sales to one more market, Nagpur. However, plans are afoot to add 22 more before the end of this year.
“We have commenced sales (of the Chetak) in Pune and Bengaluru but demand exceeds supply. We should be looking at a strike rate of 1,000 units a month for the Chetak. We should be in four more cities within this quarter and in 25 by end of this year,” Sharma added.
Bajaj Auto further clarified that it has built a manufacturing capacity of 60,000 units a year for the Chetak.
“We are very excited about the prospect of new opportunities EV offers particularly in the space of lighter vehicles like scooter and step-thru. In the next 3-5 years this space offers a huge opportunity to enter a market of 5 million scooters in India and almost 7 million scooters and step-thrus overseas. The transition is expected to unfold over a period of time because the cost of EVs as of date is far in excess of similar ICE vehicles,” Sharma pointed out.
“We recognise that this may change in the future and therefore our objective is to be prepared to leverage this change as it unfolds. Our immediate focus is on building capability and consumer connect and we have started it with the Chetak,” he added.