Hero MotoCorp’s decade-long strategy of taking minority stakes in electric vehicle (EV) startups has produced both a spectacular winner and its first major setback.
The country’s largest two-wheeler maker has sharply marked down the value of its investment in the Netherlands-based electric motorcycle startup Zero Motorcycles, even as its stake in listed scooter maker Ather Energy has multiplied in value. The write-down comes despite Hero maintaining that its technology partnership with Zero on premium electric motorcycles remains intact.
A review of Hero MotoCorp’s annual reports between FY24 and FY26 shows the carrying value of its investment in Zero Motorcycles fell 92% to ₹19 crore in FY26 from ₹241 crore a year earlier, after already declining 45% from ₹438 crore in FY24.
The markdown followed a funding round that Hero did not participate in, diluting its shareholding in Zero to 0.8% from 6.9%, according to the company’s latest annual report.
“During the year, an investment of $35 million (approximately ₹330 crore) was made in Zero Motorcycles, Inc. by the existing shareholder, along with certain restructuring arrangements, resulting in dilution of the Company’s shareholding from 6.90% to 0.8%,” Hero said in its FY26 annual report.
“Management has considered the transaction valuation as a Level 2 input for fair valuation of the investment and, accordingly, recognized a fair value loss of ₹222 crore during the current year,” it added.
The company did not explain the markdown recorded in FY25, when the investment’s value had already fallen 45%.
Hero MotoCorp did not respond to Mint's queries until press time.
A tale of two investments
The contrast with Hero’s investment in Ather Energy is stark.
Since 2016, Hero has invested about ₹1,700 crore in Ather Energy through multiple funding rounds. Ather went public in May last year, and Hero’s current 30% stake is now valued at more than ₹13,000 crore. Hero is also a promoter in Ather alongside co-founders Tarun Mehta and Swapnil Jain.
Zero, by comparison, has become Hero’s first major markdown among its strategic investments in electric mobility startups.
The investment in Zero formed part of Hero’s broader strategy to build exposure across the EV ecosystem, spanning electric scooters, motorcycles, commercial vehicles and battery swapping. Besides Ather, Hero invested ₹525 crore in electric commercial vehicle startup Euler Motors in March last year and partnered with Taiwanese battery-swapping company Gogoro, founded in 2011, which later listed on Nasdaq.
Experts say Zero has struggled to build scale while generating limited strategic benefits for Hero.
“Zero has been around for some time but there haven’t been much synergies both the companies have been able to unlock. Sales would be in four digits annually so it doesn’t have the scale yet,” Deepesh Rathore, founder and head of research at InsightEV, a consultancy, said.
“Hero’s returns from domestic investment in the technology would yield it better synergies rather than chasing Zero Motorcycles which is seeing its own product and strategy churn,” Rathore added.
The markdown also comes as Zero has shifted its focus from the US to Europe. Founded in California in 2006 by former NASA engineer Neal Saiki, the company relocated its headquarters to the Netherlands in October 2025, saying Europe offered the strongest long-term opportunity for premium electric motorcycles.
Partnership continues
The investment setback has not ended the companies’ product collaboration.
Hero announced a $60 million (about ₹490 crore) investment in Zero Motorcycles in September 2022, and the companies expanded the partnership in March 2023 to jointly develop premium electric motorcycles.
At the EICMA motor show in November last year, Hero said it had developed concepts for two electric motorcycles. Its electric vehicle business operates under the VIDA brand.
The company also said it had developed an electric motorcycle, Project VxZ, with Zero Motorcycles, which Hero described as a leader in high-performance electric motorcycles. Hero has not announced a launch timeline for the jointly developed product.
“The collaboration with Zero Motorcycles promises to redefine premium electric mobility for a new generation of riders,” Hero said in its latest annual report, indicating the technology partnership remains in place despite the investment markdown.