Hero Electric, the country’s largest electric two-wheeler manufacturer, plans to double its capacity to 75,000-80,000 units per year over the next three years, despite rising competition in the segment following the entry of traditional motorcycle and scooter manufacturers, a senior company executive said.
The company also plans to increase its dealerships to 1000 from the current count of around 600.
Naveen Munjal, chairman of Hero Electric, told Mint the company is targeting raising more funds next year to not only expand its manufacturing capacity, but also to increase the number of dealerships and marketing initiatives.
In December 2018, Hero Electric had raised ₹160 crore from Mumbai-based Alpha Capital to build its second factory, develop new products, and expand dealer network on hopes that local demand for its eco-friendly products will nearly double in the next few years.
Since then, competition in the segment has heated up.
Bajaj Auto Ltd showcased its first electric scooter named Chetak in October, while TVS Motor is expected to launch their product in 2020. “The entry of Bajaj and TVS is a good thing since that will open up the landscape. Our market share will shrink but the market will expand. So, there will be opportunities," added Munjal.
The Munjal-led company’s sales in the first six months of the this fiscal fell following the introduction of new government regulations, effective April, under the second phase of the Faster Adoption and Manufacturing of Electric and Hybrid Vehicles (FAME) programme, which required retooling of its products. Munjal did not disclose the sales of his company for the period.
“The government needs to provide demand incentives and should look at a three year window," said Munjal. “Till date some of the critical components for the internal combustion engine driven vehicles are imported and it took so many years to localise. Same will be for electric vehicles as well."
The union government has sanctioned Rs10,000 crore for the FAME scheme to incentivise sales of electric vehicles across the country. The incentives, though, will be given only if manufacturers start using locally-made parts for their vehicles.