EVs haven't taken off despite subsidies: Rajiv Bajaj

Bajaj Auto managing director Rajiv Bajaj says electric vehicles haven’t taken off like a rocket despite government subsidies such as FAME and other state-wise incentives.

“Despite the government pouring so much money into electric vehicle subsidies, at the end of the day, what do we have to show for it – 5% penetration in two-wheelers and somewhere between 1-2% in cars as far as electrics are concerned,” Bajaj says at the launch of world’s first CNG (compressed natural gas) motorcycle ‘Freedom’.

'It doesn’t seem that it has taken off like a rocket after so many years of FAME and state-level subsidies and push by OEMs (original equipment manufacturers),” he says.

“Something is holding the consumer back and the question is what? We think it’s a combination of things but more than anything it is the unfamiliarity with the technology, the concerns with range, the concerns with charging, and the concerns with safety,” the MD of India’s most valuable two-wheeler maker says.

It doesn’t help if a bunch of people bring in rubbish from China and send it to dealerships, he says, adding they have not done any favour to the industry.

“There is a lot of apprehension as it does not explain why despite some people (OEMs) who drop the price by ₹10,000 every month but still the penetration is only 5%. Obviously, It doesn’t hit the sweet spot as yet as far as electrification is concerned,” says Bajaj.

“In CNG, there is no concern for range, no concern for charging and we don’t need subsidies,” he argues.

With its CNG motorcycle ‘Freedom’ priced at ₹95,000 (ex-showroom Delhi), Bajaj Auto looks to offer a cost-effective and environmentally friendly alternative to traditional petrol motorcycles.

Bajaj has a small share in light-weight commuter motorcycles of around 100cc and 125cc, which constitutes 75% of India’s two-wheeler market.

“In major cities where there is adequate availability of CNG, 30% of car sales are CNG. If 30% is the penetration that CNG motorcycles achieve. Then 30% of 7 lakh motorcycles is 2 lakh motorcycles,” says Bajaj.

“When I joined Bajaj in the 90s, 70% of two-wheelers in the country were scooters. Everyone said this will never change. In a matter of five years, it went from being 70% scooters to becoming 70% motorcycles,” he says, adding that a similar change is likely to happen in consumer behavior.

To be clear, CNG is still unavailable in India's hinterland and the queues at CNG pumps in metro cities have gotten longer and longer.

"About 335 cities in India are covered with varying degrees of CNG network in India. These 335 towns are about 70% of our market in two-wheelers,” says Rakesh Sharma, executive director, Bajaj Auto.

For ‘Freedom’, the automaker will initially begin deliveries in Maharashtra and Gujarat. It plans to enter other states by the end of the next quarter.

The CNG motorcycle launch comes 25 years after the Pune-headquartered company introduced India's first CNG three-wheeler Bajaj RE.

Bajaj claims its CNG motorcycle offers around 50% cost savings by reducing fuel expenses, as compared to similar petrol motorcycles. The CNG tank provides a range of over 200 kilometres on 2 kg of CNG fuel. Additionally, it has a 2-liter petrol tank offering over 130 km of range in case the CNG tank empties.