Royal Enfield, India’s leading motorcycle manufacturer in the middleweight segment, will invest Rs 250-300 crore in executing its electric vehicle (EV) strategy. “25-30% of Royal Enfield’s Rs 1,000 crore capital allocation for FY24 will go towards electric vehicles,” said an industry source requesting anonymity.
B Govindarajan, CEO of Royal Enfield, while speaking to CNBC-TV18, confirmed that the company is already working on electric vehicle platforms and plans to launch its first premium electric motorcycle by 2025. “We spent two years assessing the market and understanding what the customer wants from Royal Enfield. We are now in investment and execution mode and are establishing our supply chain. We promise to bring a disruptive gorgeous motorcycle to customers by 2025,” he said.
The company recently acquired 60 acres of land outside Chennai at Cheyyar and is building a third plant at this new facility, which is 20 km away from the existing plants of the company. “Royal Enfield is currently setting up an electric vehicle production line at Vallam and eventually plans to consolidate EV production at Cheyyar plant,” said Govindarajan. The company is initially planning an electric vehicle manufacturing capacity of one lakh units annually, on a two-shift basis.
While the capital allocation towards electric vehicles is likely to grow year on year, Royal Enfield plans to continue investing in its internal combustion portfolio to grow both domestically and in international markets. The company already has completely knocked down (CKD) plants in Thailand, Brazil, Columbia, and Argentina and plans to begin assembly in Nepal by next month, followed by Bangladesh next year.
“Royal Enfield has 1,100 retail outlets abroad. We are looking at expanding outlets in all countries where we are. The addressable market is almost a million units outside India of which our market share is 7-8% and we see a huge headroom for growth. The international market is at an inflection point for Royal Enfield. See good growth in the exports over the next decade,” Govindarajan added.
When asked whether Royal Enfield will raise capital for its EV program, the CEO said that the company has strong cash reserves and at this stage, there is no need for outside capital. The company will fund its entire EV rollout on its own. A dedicated team of 60 professionals is working on Royal Enfield's EV portfolio.
Govindarajan, while speaking on the collaboration with electric performance motorcycle maker Stark Futures, said that Royal Enfield was helping the European company in scaling up production and its supply chains while Stark Futures is supporting Royal Enfield with motor, battery technology and precision electronics.
