Bajaj Auto Targets 80,000 Monthly Chetak Units by Q4, Eyes Sixth Manufacturing Plant

Bajaj Auto plans to increase monthly production of its Chetak electric scooters to around 80,000 units by fourth quarter of FY27 from just over 62,000 units currently, as demand continues to exceed available capacity, according to Joint Managing Director Rakesh Sharma. The company is also evaluating locations for its sixth manufacturing plant to support future growth across electric scooters and premium motorcycles.

During a media interaction following the company's Q2 FY27 results on Tuesday, Sharma said Bajaj had restored Chetak production to full capacity after earlier supply chain disruptions, but continued to face demand exceeding available production.

The company had previously been able to manufacture only around 40,000 scooters a month against available capacity of 60,000 units, resulting in a shortfall of approximately 20,000 units due to supply interruptions. "But now, we are back and we are making, going 100% on the capacity. However, the requirement is more than this," Sharma said.

He said the company expects to complete further debottlenecking during the January-March 2027 quarter, enabling Chetak production to approach 80,000 units a month, closer to its current requirements.

The capacity pressure is not limited to electric scooters. Sharma said Bajaj was also facing constraints in its premium motorcycle and internal combustion engine businesses, prompting the company to explore a new manufacturing facility.

"We are in serious discussion with a few states and assessing where we should base our new sixth plant," he said, adding that a cross-functional team was evaluating possible locations and proposals across India.

The company has not disclosed the proposed investment, production capacity, location or timeline for the new plant.

The expansion plans come as Bajaj expects electric scooters to account for a substantially larger share of India's scooter market over the next few years. According to Sharma, electric vehicles currently account for around 25% of scooter sales nationally, and penetration could reach 50% over the next three to five years.

"It is not difficult to imagine that 50% of the scooters will be electric," Sharma said, although he indicated that the transition could take three to five years.

He pointed to differences in electric scooter penetration across states as an indication of the opportunity for further growth. According to figures cited by Sharma, electric scooters account for around 40% of scooter sales in Odisha and 30-35% in Maharashtra, compared with 10-12% in Gujarat.

Sharma said electric mobility was spreading beyond major metropolitan markets into smaller towns, although adoption remained uneven. He also noted that charging access in apartment complexes and concerns around range continued to restrict adoption among some buyers.

The shift towards electric scooters is particularly significant for Bajaj Auto, which had exited the conventional scooter segment several years ago. Sharma said electrification had given the company an opportunity to return to the market through Chetak.

The company's electric scooter business has also gained scale. According to Bajaj Auto's Q2 FY27 earnings disclosures, Chetak recorded its highest-ever quarterly revenue of more than Rs 2,000 crore, with sales volumes more than doubling year on year despite supply constraints.

Bajaj's overall electric vehicle portfolio, including electric two-wheelers and three-wheelers, recorded volumes of nearly 2 lakh units during the September quarter and contributed approximately one-third of domestic revenue.

Sharma said the company's electric vehicle operations, which previously weighed on overall margins, had now become margin-accretive. Chetak has achieved double-digit profitability at the operating level, while electric three-wheelers have continued to deliver double-digit margins.

"The more we sell EV, we are making money," Sharma said, clarifying that the company does not separately report profit after tax for individual product businesses.

The improved profitability comes amid rising input costs. Sharma said higher commodity, polymer and electronic component prices had increased costs during the quarter, although pricing actions, stronger export realisations and a richer product mix helped offset the pressure.

Bajaj Auto reported a 34% year-on-year increase in standalone revenue from operations to Rs 20,003 crore in Q2 FY27, while net profit rose 35% to Rs 3,354 crore. Its EBITDA margin improved to 20.9% from 20.5% a year earlier.

The company also plans to expand its Chetak portfolio over the next six months to address more customer requirements as electric scooter adoption increases.