From CNG to electric, Bajaj Auto is reimagining the three-wheeler ecosystem with a pragmatic, multi-fuel strategy aimed at sustainable growth and long-term market leadership.
10 Nov 2025 | 15376 Views | By Ketan Thakkar & Darshan Nakhwa
For decades, Bajaj Auto’s three-wheelers have been an unmistakable part of India’s streetscape — ferrying workers, families, and goods through the country’s crowded lanes. Few companies command such a share of any Indian market. Yet, in a world shifting rapidly toward electrification, legacy alone isn’t enough.
At Bajaj Auto’s ...
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For decades, Bajaj Auto’s three-wheelers have been an unmistakable part of India’s streetscape — ferrying workers, families, and goods through the country’s crowded lanes. Few companies command such a share of any Indian market. Yet, in a world shifting rapidly toward electrification, legacy alone isn’t enough.
At Bajaj Auto’s Pune headquarters, Rakesh Sharma, Executive Director, along with its team of engineers, is re-architecting a business that still generates steady cash and maintains a dominant market share but now faces the challenge of evolving its core. His approach: a multi-fuel strategy that keeps CNG at the centre, scales electric thoughtfully, and builds cost resilience for the long haul.
“It’s not about abandoning what works,” Sharma said at the company’s Q2 FY26 analyst call. “It’s about making sure we evolve without losing what defines us.”
CNG: The Foundation Holds
After a challenging first half of the year, Bajaj Auto’s legacy three-wheeler business is showing signs of stability. The government’s recent GST rate cut has helped rebalance economics for fleet buyers and drivers, making CNG a smarter bet once again.
After months of decline, the internal-combustion auto-rickshaw segment has stabilised. The government’s GST rate cut shortened the payback period for fleet buyers, reviving demand.
“ICE auto had been declining from April to August by about 4–5 percent,” Sharma said. “Because of the GST rate cut, the payback period has improved… we feel this minus 5 percent will become about 0 percent — sluggish, but welcome.”
With an 80 percent share, Bajaj’s CNG models remain its most profitable products. “Products like RE CNG are highly profitable for us,” he said. The ICE segment may not grow rapidly, but it provides the base cash flow for Bajaj’s electric pivot.
E-Autos: Growth with Discipline
As the market migrates toward electrification, the e-auto segment has emerged as a barometer of change — fast-growing yet increasingly sensitive to operating costs and payback cycles. Bajaj Auto is opting for pragmatic expansion over aggressive volume chases.
The electric-auto category, once expanding at nearly 75 percent, has moderated but remains robust. “E-auto was rocking at about 75 percent growth. It’s been tempered down because the payback for RE CNG is 13 months and for E-auto, 19 months. On a level playing field, people tend to buy RE CNG,” Sharma said.
Even so, he expects about 50 percent growth this year and plans to double Bajaj’s E-Auto portfolio — from two to four models — to address specific cases.
“While everyone else has mainly one model, we have two very successful ones, and we’re introducing two more. Our segmentation — positioning products for different use cases — is what will make us win.”
Riki: Testing the Last-Mile Waters
With last-mile mobility rapidly formalising and state governments tightening regulations, Bajaj Auto is entering a segment long dominated by unorganised players. Riki is the company’s first serious step into e-rickshaws — a space ripe for structured brands and reliable technology.
Bajaj’s Riki E-Rickshaw, launched quietly in eight cities, marks its entry into a fragmented but rapidly formalising market of roughly 40,000 units a month.
“We’ve launched the E-Rick. It’s early days, but we’re very keen to grab a good share of this market,” Sharma said.
As several states tighten registration norms, Sharma sees space opening up for organised players.
“There is some element of organising happening… only the better ones are being registered. In another year or two, we’re working on more solutions for last-mile transport. It’s a large segment, and we’re in a strong position with our brand, technology, and network.”
Margins and the PLI Clock
Behind the product push is a clear financial strategy. As the government’s PLI incentives run their course, Bajaj Auto is moving to strengthen margins through localisation, cost discipline, and supply-chain efficiency.
CFO Dinesh Thapar is preparing for life after the Production Linked Incentive (PLI) scheme, which supports margins in the electric three-wheeler business until March 2028.
“The PLI is still valid till March 2028, so we’ve got about three years,” Thapar said. “The intention is to start building organic margin that will replace the PLI benefit over time.” He added, “By the time PLI gets phased out, the benefits of our cost-rationalisation work will start to play out. We’re ensuring we build margin on the back of strong cost programmes.”
Covering the Whole Market
Bajaj Auto has positioned itself as one of the few major players with a meaningful play across every three-wheeler segment — from CNG to e-auto to e-rickshaw. The strategy is clear: own the customer at every price point and fuel type.
Sharma summarises the three-wheeler landscape in simple numbers: about 40,000 ICE autos, 20,000 E-autos, and 40,000 E-rickshaws sold each month. Each segment is evolving at its own pace — and Bajaj wants to stay relevant across all.
“The 40,000 ICE ones aren’t going anywhere — the payback is better and familiarity is high. The 20,000 E-autos are growing fast, bringing first-time users. And with Riki, we now straddle the entire spectrum from E-Rik to Maxima,” he said.
Few manufacturers, he added, can claim such breadth: “Right from Riki to Maxima, and everything in between, we straddle the entire industry quite effectively.”
Measured Evolution
In many ways, Bajaj Auto’s three-wheeler journey mirrors the evolution of India’s mobility market itself — moving from endurance to efficiency, and from conventional fuels to cleaner alternatives. Rather than chasing short-term trends, the company is layering innovation on top of proven fundamentals. Its multi-fuel roadmap — anchored in CNG and expanding through electric — shows how a legacy leader adapts without losing sight of economics or scale. In a market crowded with new entrants and quick pivots, Bajaj Auto is doing what leaders do best: staying grounded, thinking long, and shaping the transition on its own terms.