Hero MotoCorp Signs Agreements with Zero Motorcycles to Collaborate on Premium Electric Motorcycles
Shares of Hero MotoCorp rose nearly 1% on Monday after the Indian two-wheeler manufacturer announced its collaboration with Zero Motorcycles, a US-based manufacturer of premium electric motorcycles and powertrains. The partnership aims to combine Zero’s expertise in developing powertrains and electric motorcycles with Hero MotoCorp’s scale of manufacturing, sourcing, and marketing.
In September 2022, Hero MotoCorp approved an equity investment of up to $60 million in Zero Motorcycles. The Pawan Munjal-led company hopes to accelerate the transition to electric mobility in India and global markets with Zero as its partner.
Hero MotoCorp has already launched its first EV, the VIDA V1 scooter, and initiated operations of its public charging infrastructure in Bengaluru, Delhi, and Jaipur. The company has set up almost 300 charging points in the three cities for public use.
India’s electric two-wheeler market is thriving, with brands like Ather, Ola, Hero Electric, Bajaj, TVS, Okinawa, PURE EV, and Revolt. According to Redseer Strategy Consultants, the electric two-wheeler sales volume in India is expected to reach 22 million by 2030, with offtake crossing 6 lakh in 2022, accounting for just over 4% of the total two-wheeler market.
Ola Electric tops the electric two-wheeler sales chart with 17% market share, followed by Okinawa Autotech, Hero Electric, Ampere Vehicles, and Ather Energy. However, Hero MotoCorp does not figure in the top 10 list.
In the quarter ended December 2022, Hero MotoCorp reported a standalone net profit of Rs 711 crore, a 3.6% increase over the previous year. However, sales fell 4% year-on-year and 13% sequentially to 12.4 lakh units in the same period, with rural demand remaining lacklustre.
Hero MotoCorp’s stock has underperformed its peers like TVS and Bajaj Auto, with its two-wheeler wholesale market share slipping from 36% between FY17 and FY21 to 32% in the current financial year, according to Jefferies. Nomura believes that it will not be easy for the company’s electric vehicles to achieve a market share similar to that of its conventional vehicles.
About Hero MotoCorp:
Hero Moto Corp earlier also known as “Hero Honda” is one of India’s first motorcycle manufacturers.
The company started in 1984 as a Technological collaboration with Honda, Japan. Before this collaboration, Hero was selling Cycles under the brand name, Hero Cycles.
In 2011, Honda group sold its 26% stake in the company to the Munjals (promoters) and ended the JV. Post the termination of JV, the name of the company was changed to Hero Motocorp.
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