Bajaj Auto plans to raise monthly production capacity for electric two-wheelers to around 80,000 units by the end of March, as demand for its Chetak electric scooter continues to exceed available output. The company currently has capacity for around 60,000 electric two-wheelers a month.

Joint Managing Director Rakesh Sharma said production had returned to the existing full capacity after a supply chain disruption affected output. The issue had reduced recent production to around 40,000 units, resulting in a shortfall of 20,000 vehicles despite strong demand.

The company expects to remove production bottlenecks during the January-March quarter and bring monthly capacity closer to current requirements. Chetak volumes more than doubled during the July-September quarter, while revenue from the segment crossed Rs. 20 bn.

Sharma said electric vehicles (EVs) had become margin accretive for Bajaj Auto rather than reducing margins. Chetak had moved from losses to double-digit profitability, while the company’s three-wheeler business continued to report double-digit profitability and had improved its performance.

Bajaj Auto is also evaluating several locations for a new manufacturing facility that would support EV and internal combustion engine (ICE) production. The company is discussing potential sites with a few state governments as it considers its sixth plant, with capacity also being assessed for premium products and high-end motorcycles.

The automaker has previously indicated that it aims to increase annual manufacturing capacity by more than 25 per cent in the medium term. Capacity is expected to rise from around 7 mn units to more than 9 mn units to meet demand for EVs, premium motorcycles and exports.