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Mumbai: Pune-based manufacturer of two- and three-wheelers Bajaj Auto Ltd is planning to set up a dedicated production plant for its electric scooter Chetak.

In an interview to CNBC-TV18 on Friday evening, Rajiv Bajaj, managing director, Bajaj Auto said that the company is planning to ramp up production capacity for Chetak and as a result is mulling to set up a dedicated manufacturing unit with an annual capacity of half a million units for the same.

The electric scooter is currently produced at the company’s Chakan plant, a unit that typically operates at near-100% capacity utilization round the year. It also rolls out premium KTM and Husqvarna bikes for the domestic as well as export markets from the site.

Delhi, Bangalore and Hyderabad are among the key locations that are being evaluated by the company to set up the said manufacturing unit, Bajaj said, adding that he finds the recently released electric vehicle (EV) policies by Delhi, Telangana and Karnataka encouraging.

Released earlier in August, the Delhi EV Policy 2020 aims to drive adoption of battery electric vehicles or EVs so that they contribute to 25% of new vehicle registrations by 2024 in the national capital.

Valid for 3 years, the fiscal incentives offered under the Delhi EV policy would be in addition to the demand incentives available under the central government’s Fame 2 or Faster Adoption and Manufacturing of Hybrid and Electric Vehicles in India scheme.

Besides offering waiver of road tax and registration fees, the Delhi EV policy offers a purchase incentive of 5,000 per kWh of battery capacity, subject to a maximum incentive of 30,000 per vehicle, for electric two-wheelers.

This is in addition to the incentive under Fame 2, which already offers a rebate of 10,000 per kWh of battery used for a two-wheeler. Further, the registered EV owner is also eligible for an incentive of upto 5,000 for scrapping or de-registering an old petrol two-wheeler registered in Delhi.

Meanwhile, besides offering tax waivers to the EV buyers, the Telangana state government is offering incentives to the EV manufacturers including facilitating land for setting up production units. The state aims to convert 80% of all new two and three wheelers sold into EVs by 2025.

The Karnataka state government, on the other hand, has proposed to offer a 20% subsidy to companies to install EV charging stations.

Bajaj Auto is already known to be working on a pipeline of new electric vehicles aimed at expanding its EV portfolio. It currently has only one model on sale - Chetak. New EVs planned are aimed at expanding the Chetak portfolio along with new models positioned under its premium KTM and Husqvarna brands.

According to the Siam data, Bajaj Auto produced 301 units of its electric Chetak in September and sold 288 units during the month. So far this fiscal, the company has sold 600 units of its electric scooter.

Meanwhile, rival TVS Motor Company Ltd has only sold 103 units of its iQube electric scooter during H1 FY21, Siam data suggests.


Bajaj Auto had launched electric Chetak in January earlier this year with a starting price of 1 lakh. The EV was launched only in Pune and Bangalore. Later supply chain disruptions from China had hit Chetak’s production and the company had to stop the production as well as bookings of the model. Later bookings were resumed in July.

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