Bajaj Auto Sees Strong EV Growth as Fuel Price Concerns Lift Demand 

Bajaj Auto Ltd expects strong growth in electric vehicle sales even as government subsidy support reduces, with expectations of higher fuel prices pushing more customers towards electric two- and three-wheelers, Executive Director Rakesh Sharma said.

Sharma said the company’s electric vehicle portfolio now contributes more than 20% of domestic revenues, with the EV business delivering double-digit margins along with the domestic portfolio. He said the impact of lower subsidies is getting diluted as consumers increasingly focus on running costs.

“The reduction in or the disappearance of the subsidy, which has now become quite less and in the face of all other things which are happening, it is really losing its edge in terms of its ability to affect consumer decision making,” Sharma said during a media call held to discuss the company’s earnings.

The comments come at a time when subsidy support for electric two-wheelers has come down sharply. Under the extended PM E-Drive framework, the incentive for electric two-wheelers was reduced to ₹2,500 per kWh, capped at ₹5,000 per vehicle, from the earlier ₹5,000 per kWh with a ₹10,000 cap. The scheme remains limited to electric two-wheelers priced up to ₹1.5 lakh.

According to Sharma, the bigger trigger for EV adoption is now fuel-price anxiety. Consumers are anticipating higher fuel prices on account of supply disruption due to West Asia conflict, and that sentiment is beginning to support electric vehicle demand, he said.

“People are anticipating price increases. They want to be free of this fuel cost. Fuel bill is an important budget and that is driving them towards adoption of electric vehicles and that I think will continue.”

He said this shift to EVs has softened the impact of lower subsidy support. “So we expect strong growth in the electric sectors,” Sharma said.

Chetak Portfolio Widens

Bajaj Auto has been expanding its electric scooter portfolio under the Chetak brand. In January, the company launched the Chetak C25, priced at ₹91,399 ex-showroom Bengaluru, with a 2.5 kWh battery and a claimed range of up to 113 km. The model was positioned as a more accessible electric scooter within the Chetak range. 

In its Q4 presentation, Bajaj Auto said Chetak delivered its strongest performance, with retail volumes crossing the 1 lakh milestone. The company said the launch of Chetak C25 helped expand the portfolio into a more accessible segment and strengthened its appeal among riders.

The company plans to further expand its electric scooter portfolio in FY27. Sharma said the new products will include changes in “form and features,” indicating that Bajaj Auto may look beyond battery-size upgrades as it builds out the Chetak range. “You are going to see new scooters, but they will all be under the Chetak umbrella,” he added.

Electric three-wheelers also remained a strong growth area for the company. Bajaj Auto said its commercial vehicle momentum was supported by a strong ICE portfolio and a growing electric three-wheeler franchise. The launch of WEGO P9018, described by the company as the largest electric three-wheeler in the industry, further strengthened the portfolio.

CNG Motorcycle Demand

While EVs are gaining traction, Bajaj Auto’s CNG motorcycle bet has seen slower adoption. Sharma said demand for the company’s CNG motorcycle has been affected by a narrowing price gap between petrol and CNG.

“For the last many months now, what has happened is that the arbitrage between CNG and petrol has changed to some extent. The gap has reduced because petrol prices have been sort of fastened and CNG prices in some key states have increased,” he said.

According to Sharma, lower savings have made customers more cautious about shifting to a new fuel technology. Buyers also have to account for a new refuelling behaviour, including using different filling stations from the ones they are familiar with.

“That has been one of the key reasons for the slowdown, or slow adoption of the CNG bike,” Sharma said.

At the product level, however, acceptance remains strong. “We are persisting with it, it is there in the market. At a product level, the acceptance is very good,” he said.

The company will now watch how the fuel-price equation evolves. Sharma said CNG availability, petrol prices and the savings gap will determine the future prospects of the CNG motorcycle.

“Depending on how the arbitrage moves, it will have an impact on the prospects of the CNG bike,” he said.