TVS Motor, Bajaj Auto plan big to strengthen e-2W game
While TVS has set a target to reach 1 lakh iQube sales by the end of this financial year, Bajaj Auto plans to launch exclusive sales outlets for its Chetak e-scooter and increase its footprint to 100 cities by April 2023.
In the electric two-wheeler space dominated largely by startups, incumbents like TVS Motor and Bajaj Auto are set to present a formidable challenge. Both homegrown companies are setting up high capacity and network expansion goals while ramping up volumes of their maiden e-scooter offerings. While TVS has set a target to reach 1 lakh iQube sales by the end of this financial year, Bajaj Auto plans to launch exclusive sales outlets for its Chetak e-scooter and increase its footprint to 100 cities by April 2023.
Among the incumbents, Chennai-based TVS Motor currently has the strongest presence in this category with over 14 percent market share, as per Vahan data. Driven by rising urban needs, TVS iQube breached 12,000 unit sales per month and clocked 29,000 units in Q3 across its three different variants. The company is looking forward to doubling its wholesales in Q4 itself on the back of a healthy order book, implying sales of about 18,000–20,000 units per month soon. It also plans to launch an array of new models in this category over the next 12–18 months.
“We are seeing a sequential rise in EV volumes every quarter. During Q1FY23 we sold 8,000 units which increased to 16,000 units in Q2. In the September-December quarter we crossed 29,000 units. With improving supply chain conditions and positive customer demand, we expect to double our volumes from the current level in Q4,” K N Radhakrishnan, Director and Chief Executive Officer, TVS Motor said in a recent call.
He further highlighted that in Q3 about 10 percent of the company’s domestic scooter volumes was contributed by electric two-wheelers. At present, TVS Motors has about 25,000–30,000 units in the pipeline. The company is quite confident of touching over 1 lakh iQube sales by end of FY23.
Additionally, company management has indicated that it expects to make the EV portfolio EBITDA-breakeven in the near term, driven by a robust distribution network of over 200 outlets and new EV models in the pipeline.
On the outlook the CEO said “FY24 will set tone for EV transformation and we will expand all India coverage of iQube and many other new launches from us in this category.”
On similar lines, its peer Bajaj Auto is poised to improve the production of its electric scooter Chetak in the coming months. According to Rakesh Sharma, Executive Director, Bajaj Auto, Chetak has crossed 10,000 units sales mark in Q3 and as electric two-wheeler penetration has been going strong the company is all set to expand to 100 cities by end of April this year.
“With clarity in the supply chain we have launched an expansion drive in new cities. From 37 cities in Q2 we are now present in 50 cities and by the end of March this number will rise to 85.Our target is to reach 100 cities by April,” Sharma said in an analyst call.
Moreover, encouraged by the rate of adoption of EVs in the scooter segment, the company has announced exclusive retail and service stores for Chetak to provide differentiated ownership experience to customers.
“The target is to make Chetak the premium and preferred choice in top 10 cities. We believe to deepen this premium position by giving a superior retail experience in our exclusive and dedicated service,” he added.
Going forward, it also aims to introduce a range of products, from low speed EVs to premium EVs. “A focus on strong R&D and stable supply chain scenarios, FY24 will see a slew of launches that will address different demographics, lower pricing, and personal as well as delivery use cases,” Sharma highlighted.
In the last two years, the adoption of e-scooters across India has expanded exponentially, not only to buyers in tier I cities but also in tier II towns. As per the retail sales numbers available on the Vahan portal, sales of electric two-wheelers surged to 6,15,365 units in CY2022 from 1,51,685 units a year ago, registering a growth of over 305 percent.
A persistent inflation and weak rural economy are major factors that have been weighing on demand for conventional two-wheelers. Also, a major chunk of entry-level two-wheeler consumers shifted towards EVs as fuel prices skyrocketed and concerns mounted over the running cost of petrol and diesel vehicles.
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