Bajaj Wants To Introduce The World's First CNG Bike. But Will It Work?
With CNG bikes, Bajaj Auto is trying to make history. At a time when electric vehicles are gaining popularity, the product isn't as promising as its rickshaws once were.
First came the electric vehicles (EVs). And now, another clean energy alternative is offering itself as an option for two-wheeler owners. Compressed natural gas, known as CNG in common parlance, is being used to power a portfolio of bikes that Bajaj Auto is developing.
CNG two-wheelers aren?t entirely unheard of, but this will be the first set of bikes that consumers can buy commercially. So far, state government-backed pilot projects that retrofitted CNG kits on scooters encountered several hiccups in performance, infrastructure issues and cost, which hindered wider adoption. Retrofitting typically involves modifying a vehicle to incorporate a new technology or component, such as adding a CNG kit to an internal combustion engine vehicle.
A pioneer of CNG technology in India, Bajaj rolled out its first CNG three-wheelers in the early 2000s, soon after the Supreme Court?s 1998 directive for all public transport (buses, taxis, and auto-rickshaws) in Delhi to be made CNG-powered. In 2022, about 95,000 CNG auto rickshaws were running in Delhi. Today, the automaker leads the three-wheeler market, with a 67% market share in FY2024. And nearly three-fourths of its three-wheeler sales
First came the electric vehicles (EVs). And now, another clean energy alternative is offering itself as an option for two-wheeler owners. Compressed natural gas, known as CNG in common parlance, is being used to power a portfolio of bikes that Bajaj Auto is developing.
CNG two-wheelers aren’t entirely unheard of, but this will be the first set of bikes that consumers can buy commercially. So far, state government-backed pilot projects that retrofitted CNG kits on scooters encountered several hiccups in performance, infrastructure issues and cost, which hindered wider adoption. Retrofitting typically involves modifying a vehicle to incorporate a new technology or component, such as adding a CNG kit to an internal combustion engine vehicle.
A pioneer of CNG technology in India, Bajaj rolled out its first CNG three-wheelers in the early 2000s, soon after the Supreme Court’s 1998 directive for all public transport (buses, taxis, and auto-rickshaws) in Delhi to be made CNG-powered. In 2022, about 95,000 CNG auto rickshaws were running in Delhi. Today, the automaker leads the three-wheeler market, with a 67% market share in FY2024. And nearly three-fourths of its three-wheeler sales are driven by CNG variants.
“It is just a question of shifting their technology from three-wheelers to two-wheelers and trying to find the best and optimum usage,” veteran auto expert and classic car restorer Tutu Dhawan told The Core.
Not only have previous attempts at CNG two-wheeler prototypes by certain state governments failed, but Bajaj has also said that its CNG motorcycles will be priced higher than their petrol counterparts. With EVs rising in popularity and the wide gaps in CNG infrastructure, one wonders what led Bajaj down this path and whether its project will find success.
How Popular is CNG in India?
CNG is cleaner — emits less carbon dioxide — and cheaper. Currently, in Delhi, CNG costs Rs 76.59 per kg compared to Rs 94.72 for a litre of petrol. This has prompted state governments across India to push for CNG adoption, which has even found some success. The highest rate of adoption still remains limited to commercial vehicles like taxis and rickshaws.
CNG vehicles are a small share of the total vehicles sold in India and three-wheelers sales in the category are also slowing down, thanks to electrification. In FY24, about 3,03,817 of the total 9,86,797 three-wheelers sold were CNG (about 31%), while about 54% were EVs. CNG infrastructure is mostly limited to urban centres at the moment, with Gujarat and Maharashtra having the highest number of CNG stations. There are currently a little over 6,000 CNG stations in the country.
As EVs become more popular, Bajaj too, is investing heavily in its EV business. For FY2025, the company has set a capex of about Rs 800 crore, mostly for its three-wheeler plant, and its electric scooters under the Chetak brand. The company’s CFO Dinesh Thapar told The Economic Times that investment in the CNG bike was not large and that the bulk of their capex was being spent on the “capabilities and capacities of our electric business”.
But why then is Bajaj investing in CNGs? The Core reached out to the company and will update this story upon receiving a response.
What Does Bajaj’s CNG Bike Promise?
The company is developing a line of motorcycles, which promise good mileage, lower emissions and cost efficiency. According to industry speculation, the first bike, which will likely be launched in June, might be in the 110-125 cc segment. Like all CNG vehicles, it is expected to have a bi-fuel option for CNG as well as petrol usage.
In an interview with CNBC-TV18, the company’s CEO Rajiv Bajaj said that they observed 50% less CO2 emissions and a reduction of 50-65% in operating costs when comparing their CNG prototype to an internal combustion engine (ICE) vehicle. The lower operating cost also makes the bike a better option for mileage-conscious users, which Bajaj is targeting.
“As a fuel, CNG is cheaper, cleaner, and more efficient compared to other gasoline options…[and] CNG two-wheelers will mean another fuel-variant option available with buyers,” Anuj Sethi, Senior Director, CRISIL Ratings told The Core.
Will It Work?
In 2016, the Delhi government started a pilot project — a CNG prototype of a Honda Activa was given to 30 delivery riders of a pizza chain. The project, however, failed to take off.
Similarly, Maharashtra and Chandigarh also introduced CNG kits for two-wheeler scooters, which could be retrofitted, in 2017. For all three states, the kits were manufactured by two players – either ITUK Manufacturing or Eco Fuel Systems Pvt Ltd (the Indian arm of Lovato), which had received approvals from the Automotive Research Association of India (ARAI).
The kits for two-wheelers came with two cylinders of about 0.6-1.2 kg each, which could run up to 100km per kg.
However, these prototypes didn’t have many takers. In 2017, there were about 25 CNG-fitted scooters in Mumbai. There’s no available data on how many scooters are present now. A three-wheeler CNG retrofitter in Mumbai’s Kandivali told The Core that two-wheeler users weren’t enticed because of the cost of fitment, the bulk of the cylinders, and issues like pickup.
The Honda Activa CNG prototypes struggled with power in CNG mode and users were advised to use it in petrol mode for a few kilometres and then switch to CNG.
Plus, the CNG cylinder, or tank, is an issue as well. “You can't have it too big and you can't have it too small,” Dhawan said. “If it is small, you won't get the mileage, if it is big, it becomes bulky and expensive. So, you have to find the right balance.”
There’s also the infrastructure issue. One, CNG refilling centres are limited to certain areas. A user might be forced to shift to petrol mode, if they can’t find a refilling centre. Two, these usually have long wait times, taking anywhere from 20 to 45 minutes to fill up a tank. This would be a significant pain point for a private user. EV users face long wait times for charging too, however, they have the option to charge their scooters at home. CNG users would not have this option.
Lastly, one must take into account the cost. The cost of fitting a CNG kit for a two-wheeler is approximately Rs 15,000-20,000. The cost of Bajaj’s bike is also expected to be higher than petrol variants in the same segment. The company is banking on the fact that the lower cost of CNG, and subsequently the lower operating cost of the bike will be promising for the user. But with CNG costs higher, the difference may not be that great as compared to the operating cost of a petrol or diesel bike.
Sethi pointed out that the cost of acquisition and cost-effectiveness (in terms of mileage, efficiency and maintenance), Bajaj’s CNG bikes is yet to be ascertained. “[This] will influence the sales and future demand for this fuel-variant,” he said.
The Rising Electric Star
There’s been a global cooldown when it comes to EV demand, and therefore it may be wise to look at other clean fuel alternatives. But in India, EVs are still having a moment, especially two- and three-wheelers. Electric two-wheelers made up 60% of the overall EV sales in FY2024. This, despite the government slashing the FAME-II subsidy for electric two-wheelers in June 2023.
Electric two-wheeler penetration is expected to grow exponentially, making up 60-70% of sales by 2030. This fiscal year, the government has extended incentives for electric two- and three-wheelers under the Electric Mobility Promotion Scheme 2024, after the FAME-II scheme ended in March 2024. This, coupled with increasing charging infrastructure, means that EVs not only pose stiff competition but could very well take the pie.
