A little over a year ago Bajaj Auto Ltd. brought a brand back from the dead to kickstart its journey into electrification. Chetak.
In name, Bajaj 1.0 will be be the face of Bajaj 3.0. But that’s where the similarity stops...for now. The once bestselling scooter sells only a few hundred electric versions a month as yet, acknowledges Rajiv Bajaj, managing director of India’s second-largest motorcycle company by volume. He says he anticipated a slow start, likening it to the Pulsar motorcycle some 20 years ago.
...the next one year we will make every effort that we can to scale this up and from there on we have to then broaden the portfolio as we did with the Pulsar and bring in more products and more brands into the EV space.Rajiv Bajaj, MD, Bajaj Auto
Bajaj intends to build an exclusive organisation around the Chetak.
“...we will be building from scratch, the new brand, the new organisation and the new distribution,” he explains in an interview on BQ’s Leadership series. Over time, the Chetak platform will be used to build Husqvarna and KTM electric scooters.
Bajaj, who famously ditched scooters for motorcycles at the turn of the century, identifies three key changes accompanying the industry’s EV transformation.
- New competitors with a lot of cash
- Companies will have to develop and internalise their own technology
- Shift in form factor
(For more on each point read the interview transcript here.)
Electrification has changed the world of automobiles in measurable and immeasurable ways. For instance Tesla Inc.’s valuation crossed $800 billion in January, after its stock rose nearly 750% in 2020. It trades at over 1,000 times earnings versus say Toyota Motor Corp., the world's largest automaker, which trades at 15 times.
Bajaj describes Tesla as having occupied the “singular position of an electric car”.
“Every Tesla on the road is electric. Can you imagine a hybrid Tesla that also has a petrol and diesel engine in it? I mean it’s sacrilege, it’s a sin almost, right?”
That brand perception will be key to success in the EV business, he says.
To drive home the point he cites a dialogue from the popular Amitabh Bachchan film ‘Sarkar’.
Will that extend across the current organisation? Will all of Bajaj Auto have to be remade?
No, he says. Bajaj intends to rely on the same principle of modularity that helped build the motorcycle business—now counted as the most valuable across the world.
“... there are people who will tell you everything will be electric in five years and there are people who will tell you it’s not going to happen for 50 years. I will fall back again on the same principle of modularity and say to myself, that we will keep ourselves ready to be able to switch from one to the other in whatever mix as required.”
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