[GTO]

Tesla is an outlier because of Musk, technology (still the best EVs) & their early-mover advantage, but for most other newer EV companies, I sort of agree with Bajaj. The entrenched players have an enormous advantage in terms of manufacturing strength, supplier base, distribution, branding etc. If the only USP of a new EV company is electric technology, it's very easy for the incumbents to catch up. And they are closing the gap fast. See in the car world, how the Taycan is already giving the Model S a tough fight, despite being priced higher. The electric Ford F150 is also a game-changer. The existing car & bike players will be a bit late to the EV scene, but they will offer a more complete ownership experience due to their infrastructure (including service, reliability etc.). Mass production isn't easy - even 2021 Teslas have several build quality issues and their after-sales service still sucks.

[am1m]

Why can't these guys just get a decent product out instead of bad-mouthing the competition?

While I have no doubt eventually the giants will take over the EV market- by buying out early players, using the sheer power of size and existing dealer network and by influencing government policies in their favour (as they have always done since Independence!)- NOT as they would have you believe through "innovation/synergy/customer-focus/etc/etc/<insert buzzword here>" - the fact is that right now I've seen FAR more Athers on the road than e-Chetaks.

I'd put the e-wheels on the ground and then say such stuff. But any press is good press and that's what he wants.

[JoeTheWanderer]

Bajaj, Enfield and TVS certainly have the advantage of having a significant amount of capital for R&D, established supply lines and so on but I don't think that is enough to make them leaders in the EV market.

Bringing out an innovative product at the right time will be key. If Ola, Ather et. al. manage to bring out solid products that people love at the right time OATS may become difficult to swallow.

I think it is important to remember that established companies betting on their past success to carry them into the future hasn't worked very well in the past. This is true for both BET and OATS - you innovate & lead or step aside & make way for someone else.

In 1986, Motorola invented the Six Sigma quality improvement process.
...
In 1991, Motorola demonstrated the world's first working-prototype digital cellular system and phones using GSM standard in Hanover, Germany.
...
In 1998, Motorola was overtaken by Nokia as the world's biggest seller of mobile phone handsets.

Source

At its peak in 2000, during the telecoms bubble, Nokia accounted for 4% of the country's GDP, 21% of total exports, and 70% of the Helsinki Stock Exchange market capital.
...
Between 1996 and 2001, Nokia's turnover increased fivefold, from €6.5 billion to €31 billion.
...
In September 2013 Nokia announced the sale of its mobile and devices division to Microsoft. The sale was positive for Nokia to avoid further negative financial figures...
...
By 2014, Nokia's global brand value according to Interbrand fell to 98th place, a sharp slide from the 5th place it was in 2009.

Source

[sri_tesla]

Rajiv Bajaj “When we launch in Oct you will get it in Nov. Not launch in 2021 and get in 2022.

LOL. Bajaj Chetak launched in Jan 2020. It took 1.5 years (not months) to even reach 3rd city. Even now, it's only available in 5-6 cities.

Rajiv Bajaj “If I were in their [EV start-up] shoes and I got no R&D, getting my stuff from China or Scandinavia"

Where is the battery in Chetak coming from? It's from China. Why does Chetak's production stop for almost a year? Because it's being sourced from a Chinese company based in Wuhan. Not just that. They couldn't even make their own motor. It comes from Bosch. Bosch does not have any EV motor production in India. So it has to come from either Germany (which is not far from Scandinavia) or Bosch's Chinese factories.

Why can't they make their own motors if they really have an R&D division? Why don't they make at least battery management systems?

It's not just Bajaj auto. It's the same with Bajaj Electricals. They are just a labeling company. They import even a table fan that costs Rs 1,700 from China and labels them as Bajaj and sell them here. It's the same with mixer grinders, microwave ovens, water heaters...

Originally Posted by GTO

Tesla is an outlier because of Musk, technology (still the best EVs) & their early-mover advantage, but for most other newer EV companies, I sort of agree with Bajaj. The entrenched players have an enormous advantage in terms of manufacturing strength, supplier base, distribution, branding, etc.

Tesla's biggest strength is manufacturing as Musk himself repeatedly said. Prior experience with ICEs will actually be a negative for the legacy companies. Their thinking will always go back to old methods of ICE manufacturing. The supplier base will be the majority of the parts will be different and the ICE supplier base won't help at all. Existing companies are trying to convert their ICE plants to EVs. That will not only be expensive but also less productive.[/quote]

Originally Posted by GTO

If the only USP of a new EV company is electric technology, it's very easy for the incumbents to catch up. And they are closing the gap fast. See in the car world, how the Taycan is already giving the Model S a tough fight, despite being priced higher. The electric Ford F150 is also a game-changer. The existing car & bike players will be a bit late to the EV scene, but they will offer a more complete ownership experience due to their infrastructure (including service, reliability etc.). Mass production isn't easy - even 2021 Teslas have several build quality issues and their after-sales service still sucks.

The reliability of traditional company EV models is not good either. Taycan is already recalled due to loss of sudden power loss while in motion. Recently another recall is due to incorrect activation of hazard lights. Ford recalled Mach-e for loose windshields and sunroofs.

Model S sales are not down due to Taycan. They were stagnated due to no proper redesign for many years. This year with new interior design, higher performance, new Model S and X has long waiting periods up to a year.

I don't think Rajiv Bajaj is worried about the likes of Ather, Tork or Simple Energy, because they don't have enough funds to expand quickly and eat into ICE business of Bajaj. He is mainly worried about Ola. Ola has been able to raise a lot of money from private investors and setting up a huge capacity. He may be criticizing about the factory for being late but he knows that Ola is building their factory faster than any Bajaj factory ever or even any factory of other traditional companies like TVS or Hero. Ola is not just building a single scooter (S1). They are also announced that they are working on a mass-market scooter (even cheaper than S1) and even bikes.

The Indian 2 wheeler market is not growing for the last 3-4 years and stalled even before the pandemic. In such scenario, a new player with massive volumes and new technology like EVs will surely eat into sales of traditional companies.

[Torino]

I believe BET can design, manufacture and sell e2-wheelers over night without breaking a sweat if they have to, cause e2-wheelers are plain simple. But the reality is they are not allowed to go full fledge into e2-wheelers just yet. BET is depended by hundreds of engine component suppliers and big oil companies. Billions of dollars in revenue and jobs are at stake. Not to forget the government becoming answerable for the sudden job loss and revenue loss which can sink the economy in depths. Not to mention the political involvement in the push for Ethanol based fuel. India will be the largest 2-wheeler market in the world 5 years in a row if it wasn't for Covid in 2020. Indian 2-wheelers are the major consumer of engine oil, gear oil, chain lube globally from biggies such as Castrol, Motul, Shell, Indian oil, BP, HP etc.

On the other hand, its only green light for OATS, they have nothing to lose, nobody stopping them, nobody hooked behind them except investors. This is not just for BET but for any other ICE 2-wheeler OEM around the world. I believe there are millions of 2-wheeler users in India willing to instantly switch to e2-wheelers if offered from traditional brands (BET, Honda, Yamaha, Suzuki) rather than startups. We are seeing only startups Energica, Zero, Damon, VinFast, Niu, Gogoro, Ather, Ola making big names across the globe in e2-wheeler space.

It doesn't make sense to think that traditional ICE 2-wheeler companies don't have the capability to manufacture and sell e2-wheelers, its just that they aren't allowed to do it just yet by the suppliers, oil companies and local government. I believe BET is forced to make a slow transition into e2-wheelers to give fair amount of time for the entire automotive industry to embrace the shift to EV especially in a country like India where ICE 2-wheelers manufacturing is part of the economy's backbone.

British Petroleum (Castrol), Shell and other European oil companies have already started shutting down oil rigs and selling assets to the Americans. They have also started investing in large wind and solar energy farms to generate clean energy to supply to Amazon facilities in EU and charging stations. Emerging tech such as EV motor & battery, Chips, ADAS and connected tech will support the gradual transition for engine component suppliers.

EVs are the future and everyone knows this, its just the traditional ICE companies aren't going to jump into e2-wheelers in the pace we expect. Its going to be gradual during the next 5 years and there is nothing they can do about it. So what is stopping ICE 2-wheelers makers for going all out into e2-wheelers right now? Well, almost everything!

[payeng]

Mr. Bajaj can definitely say what he wants.

After all he has successfully managed to multifold his ShareHolders investment over two decades. BAL is still considered as a Bluechip and Safe investment.

Time for Bhavish (OLA Founder) to Walk His Earlier Talk.

[amol4184]

Thanks Mr. Bajaj for enriching my vocabulary with these new BET and OATS terms. I honestly had not heard those before. Perfect.

This should go straight to tbhp lingo and share top honors with FNG, ASS and what not.

[libranof1987]

While I'm no fan of Bajaj (the company), there is some truth in his statement about the "OATS" he's referred to. The traditional manufacturers - Bajaj, TVS, Honda and so on have a VERY established business that has run for decades. While it can, at times, be counterproductive, a very strong foundation bodes well to a) absorb internal/external shocks (Covid for eg.), b) prepare well for new offerings.

These new age startups have the luxury of investor cash to splurge - and that party isn't going to go on forever.

EVs are still very unchartered territory - we don't know how they will fare up in the longer (~ 5 years+) run. Just technological advancements won't cut it for them, they have to look at the broader supply chain and end-to-end lifecycle. How do they handle geo-politics (since so much of this business for OATS is dependant on China), how do they manage chip shortage, scaling up operations, customer service.. and so on. The B-E-T guys have their bread and butter business going strong to coddle their EV business.

Also, comparing every other EV startup with Musk is pointless - call it foolish bravado, call it balls of steel, call it unparalleled grit/hard work/vision or call it chutzpah, there's only a handful of the likes of Musk.

[narayans80]

Isn't Hero Motorcorp a major stakeholder in Ather? And there is a reason for it, they can't use the Hero Electric brand. So part of the statement is already incorrect to begin with.

Although I guess he means, if we can't beat you we'll buy you. But we know from history , buying is fine, not having a clue how to capitalize with it is another story. Remember what Mahindra did with Maini?

[androdev]

Originally Posted by sri_tesla

I don't think Rajiv Bajaj is worried about the likes of Ather, Tork or Simple Energy, because they don't have enough funds to expand quickly and eat into ICE business of Bajaj. He is mainly worried about Ola. Ola has been able to raise a lot of money from private investors and setting up a huge capacity. He may be criticizing about the factory for being late but he knows that Ola is building their factory faster than any Bajaj factory ever or even any factory of other traditional companies like TVS or Hero. Ola is not just building a single scooter (S1). They are also announced that they are working on a mass-market scooter (even cheaper than S1) and even bikes.

Ola is all about giving an exit to their impatient investors through an IPO. Loss making startups have become the darlings of IPO market recently and the likes of Ola might be able to pull it off and make their investors rich. I really doubt the likes of Bajaj can be challenged by these startups unless they focus on building a lasting business instead of finding clever ways to provide profitable exits to their investors.

It is a pity that the IPO market and stock market in general have lost any sense of rationality and removed the last line of defence against irresponsible and immoral entrepreneurs, investors and central banks.

[lsjey]

In order to succeed in the two-wheeler or four-wheeler markets, one needs pervasive presence. Digital marketing will take you some initial distance with the digital generation, that is all.

The ICE two-wheeler companies have this presence in every city, town and village in India. This is a huge advantage. That is why the ICE two-wheeler manufacturers can afford to wait and watch and follow later after the startups' set up the initial infrastructure with other-peoples-money.

Add to this, none of the startups have done any groundbreaking R&D in EV technology. They are just tinkering around and assembling the bikes importing from China.

Regards,
lsjey

[sri_tesla]

Originally Posted by androdev

Ola is all about giving an exit to their impatient investors through an IPO. Loss making startups have become the darlings of IPO market recently and the likes of Ola might be able to pull it off and make their investors rich. I really doubt the likes of Bajaj can be challenged by these startups unless they focus on building a lasting business instead of finding clever ways to provide profitable exits to their investors.

People seem to be confused with Ola cabs IPO with Ola electric. The proposed IPO is for their ride hailing business.

Ola Electric already raised lot of money separately from private investors. As per reports, they are already in talks with existing and new investors for even more investments. I don't think Ola Electric will come for IPO anytime soon. They may go for IPO after 2-3 years by the time they will have proven themselves.

EV and renewable energy businesses are the future. They are the major industries which are able to attract huge investments all over the the world not just in India. That is also why Tata Motors is able to attract $1 billion easily for their EV division.

[payeng]

Originally Posted by sri_tesla

People seem to be confused with Ola cabs IPO with Ola electric. The proposed IPO is for their ride hailing business

No sane investor would invest in a ride hailing business right now. I would stay away miles from it.
No Stickiness with Customer, No pricing power, Not Profitable.

[2000rpm]

Originally Posted by GTO

Tesla is an outlier because of Musk, technology (still the best EVs) & their early-mover advantage, but for most other newer EV companies, I sort of agree with Bajaj.

Exactly, I dont think the newer companies understand what it takes to develop and build new vehicles with the required quality year on year. Even some one as accomplished like TATA (in CVs) took more than 20 years to get their act straight. So these companies will take atleast 10 years to become mature.

[udaikalra01]

Ather trolls Rajiv Bajaj and it's hilarious.
They're launching OATs for Champions- Recommended by "experts"