Hero Electric raises INR 160 Crores, looks to expand India operations rapidly
- Published | 12 December 2018
This is the company’s first round of external funding which is expected to fuel Hero Electric’s growth strategy.
India: Hero Electric, the country’s leading electric two-wheeler manufacturer looks to double its sales over the next year on the back of INR 160 crore-funding it has raised, as it sees the electric vehicle market in India growing despite the lack of a nationwide e-mobility policy, a senior executive of the company said.
Hero Electric, which holds a 45% market share in the electric two-wheeler segment in India, has divested a minority stake in Alpha Capital Advisors, a Mumbai-based investment management firm. This is the company’s first round of external funding which is expected to fuel Hero Electric’s growth strategy, managing director Naveen Munjal. The company plans to set up a new manufacturing facility in the southern part of the country, while its current facility in Ludhiana is also under expansion, and has a capacity of 75-80,000 units per year, Munjal said. The company, which is doubling its sales per year, is charting a growth strategy despite clarity on the electric vehicle policy. Munjal said that the industry will not take off if companies were to wait for clarity on policies. “In the absence of long-term policy, growth is a problem. But we are already moving in a direction where we believe that electrification will happen with or without the government policy and eventually different state governments will step in and have their own electric vehicle policy,” Munjal said. “We are only gearing up for the conversion when that happens.”
According to BlueWeave Consulting, Hero Electric has transitioned its entire product portfolio to lithium-ion battery-powered two-wheelers, plans to launch more products in a phased manner. The electric vehicle (EV) market is expanding. To achieve the vision of exponential growth and double sales every year, the company plans to make significant additions to its manufacturing capacity by setting up multiple plants over the next five years. Over the past decade, Hero Electric has launched 15 electric two-wheelers in India. It has around 45 percent market share in the country's electric two-wheeler segment. Uttar Pradesh, Haryana, Tamil Nadu, Delhi and Maharashtra are among key states which have accounted for the company's highest volumes and also have the highest growth potential for the electric two-wheeler segment. As opposed to the electric four-wheeler segment, where charging infrastructure is a pertinent requirement, and one of the key enablers, the two-wheeler segment is largely unaffected as various models like batter-swapping, charging at home, etc., can address range-anxiety among customers. India is the world’s biggest market for e-bikes. Because of so much pollution in Delhi and other Indian cities, people would switch to e-bikes very soon. And, the Modi government’s decision to encourage the use of e-vehicles is all the more reason for two-wheeler makers to support e-vehicles. Electric vehicles (EVs) are the most fuel-efficient reduces emissions and significantly lower energy costs, thus EVs are on high demand. Thus in near future, the market will witness significant growth.
According to the report by BlueWeave Consulting on “Global Electric Commercial Vehicles Market, By Propulsion, By Vehicle Type, By Component Type, By Region- Industry Analysis, Size, Share, Growth, Trends & forecast by 2018-2024”, the global electric commercial vehicle is projected to grow over a CAGR of 12% during the forecast period of 2018-2024 by value. The market is expected to reach around USD 149,316 Million by 2024. The demand for electric vehicles and charging station is governed by an increase in demand for fuel-efficient, high-performance, and low-emission vehicles. In addition, the trend of reduction in vehicular emission due to stringent rules & regulations in several countries and growth of public charging infrastructure in China, India, and the other developed countries are fuelling the market growth.
According to the recently published report by BlueWeave Consulting on “Global Electric Vehicle Charging Station Market, By Product Type, By Installation Type, By Suppliers Type, By Region- Industry Analysis, Size, Share, Growth, Trends & forecast by 2018-2025”, the growth is attributed to an increased deployment of charging stations at public places such as shopping malls, commercial buildings, airports, and restaurants. The convenience of being able to use an EV charger while shopping or during office hours is expected to boost the adoption of electric vehicles. Furthermore, government offerings, such as tax credits, on the installation of publicly accessible stations are expected to boost the market.
According to the report by BlueWeave Consulting on “Global Electric vehicle Battery Market, By Battery Type, By Vehicle Technology, By Vehicle Type, By Region- Industry Analysis, Size, Share, Growth, Trends & forecast by 2018-2025”, the global electric vehicle battery is projected to grow over a CAGR of 19.04% during the forecast period. The growing demand for Electric Vehicles (EVs) is primarily responsible for the aggressive growth of EV batteries. The sales of electric vehicles have increased due to the increasing government support in the form of tax credits and lucrative subsidies and consumer awareness of the usage and benefits of these vehicles. Moreover, huge investments by major players to set up EV battery plants are expected to further drive the market.