File image: Pawan Munjal, CMD of Hero MotoCorp
With the shift to electric vehicles imminent, Hero MotoCorp, the country’s largest two-wheeler manufacturer, is exploring business models in the areas of EV batteries and charging networks to generate new revenue streams.
The maker of Splendor motorcycles and Maestro scooters will launch its first-ever electric two-wheeler in FY22 in an attempt to grab a slice of the expanding market for battery-powered vehicles.
Looking for opportunities as demand gradually moves to battery-powered electric vehicles, Hero MotoCorp said in its latest annual report that it will explore new business models such as battery as a service and vehicle as a service.
Since starting operations in 1983 with the rollout of its first two-wheeler, Hero MotoCorp has not diversified into new business models till date. Venturing into a service-oriented business model with electric vehicle batteries as well as vehicles as service will be a first for the company.
“(Will) identify new revenue streams for charging infrastructure and accelerate digitisation efforts to target new-age customers and expectations,” the company said in the report.
Hero MotoCorp will not stop at electric two-wheelers. The company has ambitions to venture into other types of vehicles, although it is yet to make its ideas public on this.
“Our vision is to look beyond the traditional mobility space and we are already making investments in electric mobility products, both personal and mass transit,” chairman and managing director Pawan Munjal told shareholders. “We have already declared our next ambitious goal – we will achieve the target of the next 100 million within this decade. In keeping with our vision - ‘Be The Future of Mobility,’ our 200 millionth vehicle may not be a two-wheeler.”
In April, Hero MotoCorp tied up with Taiwan’s Gogoro to develop Hero-branded EVs for the Indian market. Gogoro is known for its battery-swapping and smart mobility innovation.
Hero MotoCorp, which has a 37 percent market share in India’s petrol-powered two-wheeler market, is pressing the pedal on EVs, which coincides with aggressive initiatives by the Central and state governments for pushing electric mobility.
Recently, the union government raised incentives for electric two-wheelers, which was followed by Gujarat rolling out its own subsidy plan to promote the sale of electric two-wheelers in the state. Delhi, Bihar and Maharashtra already have such demand-incentive offers.
Hero’s entry into the EV space will come a little over two years after peers Bajaj Auto and TVS Motor Company made their debut. Bajaj Auto launched the all-electric Chetak, while TVS rolled out the iQube, both in January 2020.
Hyundai-backed Ola Electric will debut its yet unnamed, electric scooter in a few months, while market leader Hero Electric has lined up multiple city and high-speed electric scooter models for the Indian market. Hero MotoCorp-backed Ather Energy is adding new markets as part of its expansion plans.