Hero Motocorp bets on steady EV market growth, eyes pan-India expansion

Niranjan Gupta, CEO, Hero MotoCorp
Niranjan Gupta, CEO, Hero MotoCorp

Summary

  • Two-wheeler maker seeks to expand sales and charging infra across India in four quarters, eyes profitability for business in 2 years

Hero MotoCorp, India’s largest two-wheeler maker expects it can build an exhaustive pan-India presence for its electric vehicles (EVs) over the next four quarters, a top company official told Mint on Wednesday.

Niranjan Gupta, chief executive officer, Hero MotoCorp, said it expects its EV business to become independently viable within two years. “We’re expanding not just our (EV) product portfolio but also the infrastructure required to support it. You don’t want to be in a position where customers buy a product but are left wondering where to charge it. That’s why we’ve already installed over 3,000 charging stations with Ather and operate in more than 250 cities with close to 400 outlets", Gupta said, adding that his approach to EVs so far has been “measured" as the company also focusses on correcting its EVs cost structures.

Also Read: Auto sales cool in December, but industry buoyed by overall performance in 2024

The company has been an early backer of Ather Energy, an EV startup which is now looking to go public. Hero MotoCorp, which owns nearly 40% stake, is not offloading any of its equity in the offer-for-sale. “We started eight quarters back with premium products," Gupta explained. “Today, we have affordable options like the Vida V2 in the sub- 1 lakh price segment. By the first quarter of the new fiscal, our portfolio will be complete, offering products for all customer needs."

Challenges and future outlook

Gupta was candid about the evolving EV market and Hero’s measured approach to growth. “EVs are a marathon, not a sprint," he said. “Right now, the category is only 6% of the two-wheeler market, and within scooters, it’s about 15%-16%. But this is a dynamic space. The current market leaders keep shifting as players adjust their portfolios, distribution, and pricing strategies. Stability will take time."

Hero’s deliberate pace is rooted in leveraging its established advantages. “We’ve got the widest and deepest service network in the country. For us, it’s not just about selling units; it’s about ensuring after-sales service and customer satisfaction. That’s critical for long-term success in this category," he said.

While Hero’s current EV market share is around 5% nationally, Gupta noted that the company has achieved significant traction in specific cities. “In many cities, we already have 10%-20% market share. This gives us confidence in our ability to scale."

Also Read: Electric journey helps Tata Motors, Mahindra become first to win auto PLI

One of the most critical aspects of Hero’s EV journey is ensuring its sustainability without government subsidies, which have been gradually phased down. “Subsidies are on their way out, and the industry must adapt," Gupta remarked. He acknowledged the challenges but highlighted Hero’s financial strength as a key enabler.

“Unlike startups, we don’t operate on a cash-burn model. We earn and then invest. Our core business generates strong returns—we achieved a record Ebitda margin of 16.5% last quarter. This provides the resources to invest in EVs without compromising profitability elsewhere," he explained.

Gupta admitted that the EV segment is not yet profitable. “Right now, EVs are operating at a 200-basis-point negative Ebitda margin. However, we are confident that within two years, EVs will become independently viable. This will be driven by scaling up, optimizing cost structures, and enhancing localization."

Gupta likened the current phase of the EV industry to the early kilometers of a marathon. “Right now, everyone is finding their footing—be it in terms of distribution, service expansion, or pricing strategy. Over the next couple of years, the market will mature, and we’ll start to see clear leaders emerge," he said.

Also Read: Govt wants to certify all automotive PLI applicants by July

While EV adoption in India is accelerating, Gupta believes it will remain concentrated in the scooter segment in the near term. “Scooters are driving EV growth, and this is where the disruption is happening. As the category grows, it will allow us to regain market share that we lost in internal combustion scooters. By 2030, it’s reasonable to expect that half of all scooters sold in India will be electric," he predicted.

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
more

topics

MINT SPECIALS