Hero gears up to join EV race, 1st e-bike by March
India’s largest two-wheeler company Hero Motocorp will launch its first e-vehicle by March and it is most likely going to be an e-scooter. An escooter will help expand the company’s scooter portfolio in which it lags behind its rivals in market share.
“We expect the EV to come out of the Ic-engine-based scooter category and that plays to our strength, as it will give a boost to our scooter market share. Any EV evolution on the scooter side will be accretive to the Hero topline,” Niranjan Gupta, chief financial officer at Hero Motocorp, said.
CEO Pawan Munjal recently showcased a pre-production prototype of the upcoming electric scooter at the company’s 10th anniversary celebrations. The firm is also ready to take on cash-rich start-ups that are entering the EV space, executives said.
“The pace of expansion will also depend on the infrastructure readiness of the country. If you grow too fast, you might suddenly be caught without adequate infrastructure,” Gupta said, adding over a medium-term, 50 per cent of the company’s new capex will be dedicated to EV. Hero has an annual capex plan of around ~750-1,000 crore.
Ola, which netted 100,000 bookings on the very first day last month, is expected to price its electric scooter in the range of ~85,000-~1.1 lakh. The price range is one that accounts for 70 per cent of conventional, internal combustion engine (ICE) scooter sales in India.
“We all know the EV category will not be profitable from Day 1 and it will require a lot of cash. Hero will be placed in a better situation simply because of the size of the procurement, manufacturing and distribution, which a new player will have to replicate.”
Hero Motocorp as on March 31 had cash balance of ~169.22 crore, which it can use to fight new age start-ups. “There is a cash-generating machine from the IC business. We see electric vehicles to be incremental to our topline,” Gupta said, indicating the healthy cash balance.