Bajaj Auto's Chetak EV: A Strategic Powerhouse in India's Electrification Surge

India's electric vehicle (EV) market is no longer a niche experiment but a full-scale revolution. With government policies, consumer demand, and infrastructure investments aligning, the sector is poised to redefine mobility in the world's second-most populous nation. At the forefront of this transformation is Bajaj Auto, whose Chetak electric scooter has emerged as a symbol of India's electrification ambitions. The company's recent acceleration in deliveries, coupled with strategic product innovation and supply chain resilience, positions it as a compelling long-term investment in a market projected to grow 10-fold by 2030.

Market Share and Delivery Momentum

Bajaj Auto's Chetak EV has captured a 21.8% market share in India's electric two-wheeler (E2W) segment in Q2 2025, outpacing rivals like Ola Electric (19.16%) and TVS iQube (24%). This growth is not accidental but the result of a calculated strategy. The Chetak 30 Series, launched in late 2024, introduced a floorboard battery platform, enhancing usability and range while slashing maintenance costs. By June 2025, the model sold 23,000 units—a 154% year-on-year increase—driven by its affordability (₹99,990) and practicality for urban commuters.

The company's delivery targets for August 2025—15,000 Chetak scooters and 7,000 electric three-wheelers—reflect its confidence in the festive season demand. This surge follows a critical supply chain breakthrough: resolving a rare earth magnet shortage that had threatened production. By securing alternative magnet sources and optimizing manufacturing, Bajaj has stabilized output, with plans to scale to 40,000 units in September.

Strategic Positioning in a Policy-Driven Market

India's EV growth is underpinned by aggressive government initiatives. The Production Linked Incentive (PLI) scheme for automotive components, the FAME II program, and the PM E-DRIVE initiative have collectively allocated over $1.28 billion to expand charging infrastructure and incentivize local manufacturing. Bajaj Auto is uniquely positioned to benefit from these policies. Its vertically integrated supply chain, $2.1 billion in cash reserves, and focus on cost-effective innovation align with the government's push for domestic EV production.

The company's pivot to low rare earth (LRE) magnets in its motors is a masterstroke. By reducing dependency on China for critical components, Bajaj mitigates supply risks while maintaining production efficiency. This agility is critical in a market where global supply chain disruptions—such as China's temporary rare earth export ban in April 2024—can cripple competitors.

Export Growth and Global Ambitions

While India's domestic market is pivotal, Bajaj's export strategy is equally transformative. In Q2 2025, the company's exports surged 28% to 182,857 units, with a target of 160,000–170,000 units per month by late 2025. Emerging markets in Southeast Asia, Africa, and Latin America—where EV adoption is driven by affordability and infrastructure gaps—have become key growth engines. Bajaj's GoGo electric three-wheelers, for instance, are gaining traction in logistics and ride-hailing sectors, with commercial vehicle exports rising 79% year-on-year.

This global expansion diversifies revenue streams and insulates the company from domestic market volatility. With India's two-wheeler market contracting 13% in Q2 2025, Bajaj's export resilience underscores its financial strength. The company's 19.7% EBITDA margin in Q1 FY26 and $1,200 crore in free cash flow further reinforce its ability to reinvest in R&D and scale production.

Long-Term Valuation and Risks

Bajaj Auto's stock has historically traded at a premium to peers, reflecting its leadership in both ICE and EV segments. However, its long-term valuation hinges on three factors:
1. Sustained Market Share Gains: Maintaining a 21.8% E2W share amid competition from startups and global players.
2. Supply Chain Resilience: Continued innovation in magnet technology and battery efficiency.
3. Policy Tailwinds: Execution of government targets, such as 30% EV penetration by 2030.

Investors should also monitor the company's ability to balance premium product launches (e.g., the Chetak 35 Series) with mass-market affordability. While the 35 Series accounts for 85% of EV sales in Q1 FY26, pricing above ₹1 lakh could limit growth if affordability remains a barrier for mainstream consumers.

Conclusion: A High-Conviction Play

Bajaj Auto's Chetak EV is more than a product—it's a strategic lever in India's electrification journey. With a 21.8% E2W market share, robust export growth, and a 38% lead in the E3W segment, the company is uniquely positioned to capitalize on the $1.33 million unit EV production target by 2030. While risks like supply chain bottlenecks and regulatory shifts exist, Bajaj's financial strength, innovation, and global diversification make it a compelling long-term investment. For investors seeking exposure to India's EV revolution, Bajaj Auto offers a rare combination of market leadership and strategic agility.