Why Bajaj Auto might start making EVs outside Maharashtra
What's the story
Bajaj Auto is considering relocating some of its electric vehicle (EV) production from Maharashtra and diverting future investments to other states. The move comes after a dispute with the state government over pending subsidies of nearly ₹75 crore and restrictions on new auto-rickshaw permits. The company has already invested heavily in Maharashtra through its subsidiary, Chetak Technology Ltd.
Investment
Bajaj has invested ₹750cr in EV ecosystem
Bajaj Auto has invested around ₹750 crore in its EV ecosystem at the Akurdi plant in Pune, where it manufactures and develops the Chetak electric scooter. Supporting vendors have also invested another ₹250 crore to create a local component ecosystem. The company has allocated ₹420 crore for capital expenditure related to EVs, which could be affected by any future expansion outside Maharashtra.
Relocation plans
Bajaj Auto may move EV expansion to Pantnagar plant
As per BusinessLine, Bajaj Auto is considering moving its future EV manufacturing expansion to its Pantnagar plant in Rudrapur, Uttarakhand. The company is also looking at directing further investments toward states that offer a clearer policy support and incentives. This comes after tensions with the Maharashtra transport department over delayed subsidy payments and a recent decision to cap new auto-rickshaw permits due to market saturation.
Government stance
Maharashtra government downplays dispute
The Maharashtra government is downplaying the dispute while engaging with Bajaj Auto. P. Anbalagan, Secretary (Industries) for Maharashtra, said the subsidy issue is a small component problem from a budget perspective and that the government is working closely with the company on these issues. This comes after Bajaj Auto's MD Rajiv Bajaj publicly criticized the state's EV policy as a "massive failure."
Competition
Rival states courting Bajaj for future EV investments
In light of the situation, rival states have begun courting Bajaj Auto's management for its future EV investments. Karnataka and Tamil Nadu are among those that have started talks with the automaker about potential EV manufacturing expansion. Industry executives warn that disputes with large manufacturers can have wider ramifications, affecting the entire vendor ecosystem and employment associated with it.