New Delhi: Delhi-based scooter and motorcycle maker Hero MotoCorp Ltd on Thursday said its board had approved an investment of up to Rs205 crore for a 26-30% stake in Bengaluru-based electric vehicle (EV) start-up Ather Energy Pvt. Ltd.
“Adoption of environment-friendly fuel is a priority for Hero MotoCorp, as is propagating sustainable manufacturing through green facilities. Hero MotoCorp intends to enhance its participation in the EV (electric vehicle) space by pursuing its internal EV programme in addition to partnering with Ather,” Hero said in a statement to BSE.
It added that the payment to Ather will be made in tranches.
This is the Pawan Munjal-led company’s second investment after it separated from Honda Motor Co. in 2010, ending a 26-year partnership. Its first was in US-based Erik Buell Racing, a move that backfired after the Erik Buell-led bike company filed for bankruptcy. Hero wrote off the investment.
Hero has now taken a conscious call to foster innovation and new technologies in-house and with the help of start-ups , said Rajat Bhargava, its head of strategy and performance transformation.
“So, quite naturally, we picked up (a stake in) Ather. But it will be important that Ather continues to function as a start-up,” Bhargava added.
“I think electric two-wheelers are going to be a reality faster than the four-wheelers. So, Hero is coming from that perspective,” said Abdul Majeed, partner and auto practice leader, PwC.
Hero will have a nominee on the board of Ather.
“We will clearly not be just a financial investor. There is a lot of expertise that we have, which we will bring to the table for Ather (to use),” Bhargava said.
Started in 2013 by alumni of the Indian Institute of Technology, Madras, Ather unveiled a model of its first scooter Ather S340 in February.
The scooter will go on sale in late 2017, said Tarun Mehta, co-founder and chief executive officer, Ather.
Primarily an electric scooter, Ather S340 has a tablet-like console integrated with Google Maps and other applications. The scooter is also connected to Ather’s system, which will alert users to possible problems.
Mehta claimed the scooter runs up to 100km on full charge and can charge 70-80% in an hour.
“Launching the product commercially is still way down the road. First, we have to build a network of charging stations and an ecosystem,” Mehta said.
The money from Hero will go towards funding research and development, product testing, building a network of charging stations and expanding the product portfolio, Ather said.
Ather will also use some of the money to build a factory in Bengaluru, where it recently purchased land for one.
India wants to put as many as six million electric vehicles on the roads by 2020, with two out of every three being either a bus or a scooter/motorcycle.