4 days ago
Hero, Bajaj likely to launch new mass-market electric two-wheelers
HighlightsHero MotoCorp is set to launch two new electric two-wheelers under the VIDA brand next month, likely priced below ₹1 lakh to tap into the mass market. The company aims to achieve monthly EV sales of 25,000 to 30,000 units within two years in order to reach breakeven. Hero's entry into the sub-₹1 lakh segment comes as Bajaj Auto also prepares to relaunch a more affordable Chetak, intensifying competition with Ola and TVS. VIDA recorded 200 percent growth in FY25 with over 32,000 units sold, though Hero still ranks fifth in the electric two-wheeler market behind Ather.
Hero MotoCorp
is expected to launch two new 'affordable' products next month to augment its electric vehicle portfolio under the VIDA brand. Industry sources indicate that the new launches would likely be priced below the Rs one lakh benchmark, a segment which accounts for nearly six in 10
electric two wheelers
(e2w) sold in the domestic market currently.
The entry of Hero into the mass segment of the e2w space would be crucial for its modest e2w market ambitions, since the company has already acknowledged that breakeven for e2w business can only be achieved at total sales volumes of 25,000-30,000 units per month and reaching this volume necessarily requires presence in the mass end of the market. Hero is looking at a two-year timeline to achieve this sales number for VIDA.
It is interesting to note that Hero is planning to enter the mass segment of e2w just when
Bajaj Auto
is also believed to be getting ready with a Chetak priced below the Rs one lakh mark. An industry veteran said that Bajaj had launched a variant at about Rs 90,000 last year but withdrew it later and is expected to re-enter this segment by the festive season this year.
As of now, Ola Electric and TVS Motor Co are the only two large e2w OEMs with a presence in this segment; Ather Energy has already expressed its unwillingness to launch a product below the Rs one lakh mark.
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For the last few years, Hero has been a laggard in the e2w end of the business, trailing behind ICE competitors, TVS and Bajaj, in sales growth. Both these legacy two wheeler OEMs are now neck and neck with Ola Electric in the e2w pecking order as Hero stays in the number fifth position in terms of sales, behind Ather Energy.
The buzz about new affordable products from Hero is growing as the company released full page ads this morning in some newspapers, talking of the impending launch of an 'EVooter'. A Hero MotoCorp spokesperson merely said that details of the new products would be shared soon, without elaborating.
In a recent call with analysts Hero's Chief Financial Officer Vivek Anand said the company notched up its market share in e2w to beyond 6 per cent in FY25 and that two affordable e2w launches are planned in the first half of FY26, 'most likely in July'. According to vahan data, the company sold 32,964 units in calendar 2024 and market share in 2025 till date is about 5.35 per cent at 20,872 units retailed.
So as we really look forward, our priority is very clearly to grow volumes, to scale up the business and to really grow market share. Having said that, we will continue to improve on our profitability as we go Anand
Performance so far
Anand underlined the unprecedented sales growth of VIDA last fiscal, pointing out that year on year, the company logged 200 per cent growth in volumes. He said that EBITDA for the EV business improved to -95 per cent from -155 per cent last fiscal.
'So as we really look forward, our priority is very clearly to grow volumes, to scale up the business and to really grow market share. Having said that, we will continue to improve on our profitability as we go forward,' he said.
Promising to drive the EV business with more efficiency, he also said that the impending scale up (launch of affordable products) cost rationalisation and incoming PLI benefits will help in improving the profitability of the business going forward. 'And also what I want to really add is that at a 25,000-30,000 level of volume per month, we hope that this will break even, which in our view is a couple of years away.'
Deepesh Rathore, founder of InsightEV, a research hub on the global electric two wheeler industry, said that Hero has reinforced its commitment to the electric portfolio in the last few months and the company's decision to enter the sub Rs one lakh market was a good move.
I don't think Hero is late to the EV party. Electric vehicles are only about a million in the six million unit scooter market. The electric portion can easily grow three times to three million units in five years so there is a lot of growth yet to Rathore
'I don't think Hero is late to the EV party. Electric vehicles are only about a million in the six million unit scooter market. The electric portion can easily grow three times to three million units in five years so there is a lot of growth yet to come.'
Another industry expert pointed out that Hero has a strong distribution network, with significant penetration in the rural and semi-urban markets 'and the new, affordable products will be targeted here. As for charging infrastructure, scooters can be easily charged at home so that barrier is not significant for the hinterland consumers. Pricing is the key determinant'.
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In distribution rampup, Ather eyes hundreds of cities where competitors already present
But another industry veteran said market acceptance of Hero products was below par and he did not expect any significant increase in the current market share of VIDA. This person declined to be identified, adding that Bajaj's impending mass market product will likely increase demand elasticity for the OEM and increase competitive intensity for all players.
He said that though Ather had pooh poohed the sub Rs one lakh segment, competition could eventually force it to also offer a product in this price band.
