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Time of India
3 days ago
- Automotive
- Time of India
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. Also read: Ola points to competitive intensity for market share loss, ebike volumes key to future growth 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'. Also read: 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.
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Business Standard
14-05-2025
- Automotive
- Business Standard
EV biz to breakeven when monthly sales reach 25K units: Hero MotoCorp CFO
Hero MotoCorp was expecting its electric vehicle (EV) business to break even once it reaches monthly sales volumes of 25,000 to 30,000 units, which is a couple of years away, its Chief Financial Officer (CFO) Vivek Anand said on Tuesday. 'This year, in 2024-25 (FY25), if I really look at my EV performance, our volumes have grown by 200 per cent,' Anand told analysts during the company's post-results conference call. Hero's EV sales increased by 175 per cent year-on-year (Y-o-Y) to 48,674 units, according to Federation of Automobile Dealers Associations (Fada). Anand said: 'Our Ebitda (earnings before interest, taxes, depreciation and amortisation) for the EV business stands at minus 95 per cent in 2024-25, which… has improved from minus 155 per cent in 2023-24.' He said the company's near-term focus in the EV segment is on scaling up the business, growing market share, and reducing costs through localisation. Realisation of benefits under the government's production-linked incentive (PLI) scheme will also play a role in achieving profitability, he added. 'I want to add that when I am at 25,000-30,000 units volume sales per month, I hope that the EV business will break even, which... is a couple of years away,' Anand said. The two-wheeler (2W) industry's overall volume sales growth in FY26 was expected to be in the range of 6-7 per cent, and Hero is planning to outpace the industry. According to Society of Indian Automobile Manufacturers (Siam), in FY25, the domestic sales of the two-wheeler industry increased by 9.12 per cent Y-o-Y to 1.961 million units. Ram Kuppuswamy, chief operations officer (COO-manufacturing), Hero MotoCorp, stated that the two-wheeler industry has a lot of tailwinds this year. "We have a good monsoon prediction. We have a good marriage season after a long time, and the initial signs are already visible. The income tax relief (announced during the last Budget) is putting more money in the hands of consumers. There is a lot of government spending happening. Inflation is on the lower side. We expect the two-wheeler industry to be better that way," he explained. "Of course, there are some headwinds too in terms of OBD-2 norms (new emission norms) and the price increase in products. Overall, we expect the industry to be in the region of around 6-7 per cent... Some of our products were launched in the fourth quarter of the last financial year that are yet to fully manifest in terms of sales volume. We are very confident that we will outpace the industry growth,' said Kuppuswamy, who is also chief procurement officer of the company. As part of its planned operational strategy, Hero implemented a temporary production halt from April 17-19 at its four facilities in India to facilitate "supply chain realignment, conduct scheduled maintenance, and infrastructure enhancement". "Production is expected to normalise during this month. It is important to clarify here that we continue to grow our retail sales during the current quarter," Anand noted.
