Bajaj Auto's EV business turns profitable

Bajaj Auto’s electric vehicle business — both three-wheelers and e-scooters put together — delivered a marginal profit in the quarter ended December compared with a loss a year ago, according to the company's chief financial officer.

This turnaround was aided by growth in electric three-wheelers business and improving unit economics of the Chetak e-scooter, which is yet not profitable. “The bleed (on Chetak) has come off compared to a year ago. The rise of electric three-wheelers is creating a profit pool which is absorbing the losses of the Chetak portfolio,” Dinesh Thapar, CFO, Bajaj Auto, said in a media conference call.

“We have a line of sight on getting to the unit economics of Chetak being profitable, subject to where market pricing of EVs will eventually be,” says Thapar.

Electric vehicle producers in India have been pricing their products competitively amid rising competition between legacy players and new-age automakers.

Net profit of Bajaj Auto rose 3% year-on-year to ₹2,109 crore for the December quarter compared with ₹2,042 core in the corresponding period a year ago. Revenue from operations increased 6% year-on-year to ₹12,807 crore. Revenue was up on strong exports, a buoyant domestic electric vehicle and compressed natural gas (CNG) portfolio and another record on spares.

The automaker’s third-quarter results were powered by the rebound in its exports business. “After almost nine quarters, our exports business has registered volumes of over 5 lakh units,” says Thapar.

Within Africa, the Nigeria market has recovered to some extent. Nigeria, which used to account for sales of 50,000 units each month, had gone down to 6,000 units in Q1 FY25. However, sales in the Nigerian market have recovered to 35,000 units in the third quarter, says Thapar.

The world’s most valuable two-wheeler company continued to maintain margin at the 20%-plus level.

Bajaj Auto made significant strides made on the electric vehicles portfolio. It emerged as India top electric scooter maker in December 2024. The company trebled share in electric three-wheelers over last year. Bajaj Auto's electric vehicle and CNG vehicles contributed about 45% to domestic business revenues in the third quarter.

"In a highly competitive market, 125cc+ motorcycles delivered its highest ever quarterly retail volumes, buoyed by the festive season," the company says. Despite the retail volume growth and maintaining of market share in the strategically important 125cc+ segment, the overall performance for the quarter was impacted due to a conscious decision of not participating in the deep price discounting, it adds.