Bajaj Auto targets to boost Chetak's production to 10,000 units a month by June

Bajaj Auto Ltd is ramping up production of its electric scooter Chetak to touch around 10,000 units a month by June, having overcome supply chain constraints as it gradually expands the sales network of the brand, according to a senior company official.

The company plans to have around 150 exclusive outlets for the Chetak electric scooter by September, and is taking a calibrated expansion keeping in mind the uncertainty over the extension of FAME II scheme for the promotion of electric vehicles beyond this fiscal.

"We are trying to get to 10,000 (units) by June. It is a supply chain issue," Bajaj Auto Executive Director Rakesh Sharma said in New Delhi on the sidelines of opening of an exclusive Chetak showroom.

"The company has reached 5,000 units at present and next month, it will try to get to 7,000 units," he said, adding after that Bajaj Auto would assess how the demand is coming to plan future production roadmap.

Sharma said the company had faced problems earlier due to over dependence on certain vendors, who could not supply some parts.

"That we sorted out by the first quarter and it is giving us some confidence...," he said.

Bajaj Auto Urbanite Business Unit President Eric Vas said the company had suffered production constraints due to the transition to the new battery norm AIS 156B, which came into effect from April 1 for enhanced safety. The constraints have been resolved to a large extent.

"So, we think we will be back to normal production, in terms of production meeting our requirements of the number of stores we are opening possibly by middle to end of May and after that it is purely driven by what we want, we will get," he added.

"At present, the waiting period for Chetak is around 20 to 25 days," Vas said, adding, from May onwards, it would come down to three to five days.

On network expansion, Vas said Chetak sales network currently spans across 88 towns through 105 dealerships.

"By September, we hope to have around 150 exclusive outlets in 120 towns," he said, adding, the company would look at the market and calibrate again for expansion beyond these.

Vas said a key factor for taking such an approach is the uncertainty over the continuation of the FAME II scheme, which was extended till March 31, 2024.

"One of the things which we should have better clarity on sometime by September is what happens to FAME II after March (2024). I think a lot of things depend on that output," he said.

When asked if the FAME II scheme should be continued, he said the industry is of the opinion that cost of EVs will go up significantly if the subsidy is stopped and manufacturers could not afford to fully absorb the increased prices.

"I think prices will go up. It will stop the growth of the industry and that is why I'm saying we (Bajaj Auto) need to calibrate very carefully when we're opening (new stores for Chetak)," Vas said.

When asked about the outlook for fiscal 2023-24, Sharma said, if the supply holds out and the demand keeps picking up, along with the network expansion, Bajaj Auto could touch a total of 1 lakh electric two-wheelers between Chetak and what it supplies to electric mobility platform Yulu.