Hero MotoCorp zooms after EV deal with US-based Zero Motorcycles

Shares of Hero MotoCorp climbed almost 1 percent on Monday after the homegrown two-wheeler major said it has signed agreements with the US-based Zero Motorcycles to collaborate on premium electric motorcycles.

Hero MotoCorp had in September 2022 approved an equity investment of up to $60 million in Zero Motorcycles, a California-based manufacturer of premium electric motorcycles and powertrains.

The collaboration combines the expertise of Zero in developing power trains and electric motorcycles with the scale of manufacturing, sourcing and marketing of Hero MotoCorp, the Pawan Munjal-led firm said in a regulatory filing on March 6.

Hero MotoCorp was trading 0.98 percent up at Rs 2484.90 on the BSE in afternoon trade.

“With Zero as our partner, we look forward to accelerate the transition of electric mobility in India and across our global markets,” Pawan Munjal, Chairman and CEO of Hero MotoCorp, said.

Sam Paschel, CEO, Zero Motorcycles, said both the companies are committed to transforming the riding experience and bringing remarkable, innovative products to the world.

Hero MotoCorp launched its first EV, the VIDA V1 scooter, last October and has initiated operations of its public charging infrastructure in Bengaluru, Delhi and Jaipur.

The company said it has set up nearly 300 charging points across the three cities for public use.

Other brands in India’s thriving electric two-wheeler market include Ather, Ola, Hero Electric, Bajaj, TVS, Okinawa, PURE EV, and Revolt.

As per a report by global consultancy firm Redseer Strategy Consultants, the electric two-wheeler sales volume in India is expected to reach 22 million by 2030. The offtake crossed 6 lakh in 2022, accounting for just over 4 percent of the total two-wheeler market, according to data from the Vahan dashboard.

Ola Electric topped the electric two-wheeler sales chart with 17 percent market share, followed by Okinawa Autotech, Hero Electric (led by Naveen Munjal), Ampere Vehicles and Ather Energy.

Hero MotoCorp does not figure in the top 10 list.

The company had on February 7 reported a standalone net profit of Rs 711 crore for quarter ended December 2022, posting a 3.6 percent increase over Rs 686 crore a year ago.

The country’s largest two-wheeler maker’s revenue from operations during the quarter stood at Rs 8,031 crore, as compared to Rs 7,883 crore during Q3 FY22, witnessing an uptick of 1.8 percent.

However, its sales fell 4 percent on-year and 13 percent sequentially to 12.4 lakh units in the three months to December as rural demand remained lacklustre.

Hero MotoCorp’s stock has underperformed its peers like TVS and Bajaj Auto in recent times, weighed down by dipping market share in its bread-and-butter conventional two-wheeler segment and hyper-competition in the EV space.

Hero MotoCorp’s two-wheeler wholesale market share has slipped from 36 percent between FY17 and FY21 to 32 percent in the current financial year, Jefferies said.

According to Nomura, it will not be easy for the company’s electric vehicles to achieve a market share similar to that of its conventional vehicles.