In the bustling industrial district of Gurugram, just outside Delhi, a significant transformation in India’s electric mobility landscape is taking shape. On a warm March morning, as executives gather in Hero MotoCorp’s glass-fronted headquarters, pens hover over documents that will reshape the country’s EV ecosystem.
The Hero MotoCorp EV division is expanding its footprint through strategic investments in the three-wheeler segment. India’s largest two-wheeler manufacturer has just announced a ₹525 crore investment to acquire a 32.5% stake in Euler Motors, a move that signals its serious intentions in the electric vehicle space beyond its traditional motorcycle stronghold.
For Suman Mishra, a 43-year-old fleet operator from Delhi who has been contemplating the switch to electric vehicles for his last-mile delivery business, this news carries significant weight.
“I’ve been watching the EV space closely for two years now,” says Mishra, as he inspects an Euler Motors three-wheeler at a dealership in East Delhi. “When a company like Hero puts this much money into electric three-wheelers, it gives operators like me confidence that the technology is here to stay.”
Contents
- 1 Understanding Hero MotoCorp EV Strategy Through Strategic Investments
- 2 Electric Three-Wheelers: The Next Frontier in India’s EV Revolution
- 3 How the Euler Motors Investment Transforms Hero’s Market Position
- 4 Current State of the Indian EV Market and Growth Projections
- 5 Hero’s Comprehensive Electric Vehicle Strategy Beyond Two-Wheelers
- 6 Revolutionizing Last-Mile Connectivity EV Solutions in Urban India
- 7 The Future of Electric Three-Wheelers in India: Market Potential
- 8 Impact of Hero MotoCorp on Indian EV Market Following This Acquisition
- 9 Frequently Asked Questions About Hero MotoCorp’s EV Investment
- 9.1 What exactly is Hero MotoCorp investing in?
- 9.2 How does this investment fit into Hero’s overall EV strategy?
- 9.3 When will the investment be completed?
- 9.4 What are the advantages of electric three-wheelers for commercial use?
- 9.5 How big is the electric three-wheeler market in India?
- 9.6 Will Hero develop new electric three-wheeler models?
- 9.7 How does this investment affect competition in the EV market?
Understanding Hero MotoCorp EV Strategy Through Strategic Investments
Industry analysts are closely watching the Hero MotoCorp EV strategy as it diversifies beyond two-wheelers. This investment represents a calculated move into the rapidly growing electric three-wheeler segment, which is gaining significant traction in India’s urban transportation and logistics sectors.
“This isn’t just about adding another vehicle type to their portfolio,” explains Vikram Gulati, an automotive industry analyst with 15 years of experience tracking India’s mobility sector. “Hero MotoCorp is strategically positioning itself across the EV value chain, from two-wheelers to commercial vehicles, creating a comprehensive ecosystem that could give them a competitive edge.”
The investment structure reveals the company’s long-term commitment:
| Investment Parameter | Details |
|---|---|
| Stake Acquired | 32.5% |
| Investment Amount | ₹525 crore |
| Investment Structure | Equity shares and Series D compulsory convertible preference shares |
| Expected Completion | April 2025 |
| Target Company | Euler Motors |
| Target Segment | Electric Three-Wheelers |
With this investment, the Hero MotoCorp EV ecosystem now encompasses both two and three-wheeler segments, creating potential synergies in technology development, battery management systems, and charging infrastructure.
Pawan Munjal, Executive Chairman of Hero MotoCorp, emphasized the strategic importance of this move: “Our investment in Euler is a bold step towards realizing our vision to be the future of mobility. This allows us to venture into the rapidly growing electric three and four-wheeler market while unlocking adjacent business opportunities.”
Electric Three-Wheelers: The Next Frontier in India’s EV Revolution
Electric three-wheelers are gaining significant traction in India’s last-mile delivery and urban transportation sectors. Their compact size, maneuverability, and lower operating costs make them ideal for navigating congested urban environments while reducing pollution.
For Euler Motors, this investment provides not just capital but also access to Hero MotoCorp’s extensive manufacturing expertise, supply chain networks, and distribution channels.
“Euler has established itself as an innovator in the electric three-wheeler space,” notes Pradeep Kumar, who heads a logistics company in Bangalore. “Their vehicles have proven reliability in commercial operations, which is crucial for business users like us who can’t afford downtime.”
The market for electric three-wheelers is projected to grow exponentially over the next five years, driven by:
- Rising fuel costs making electric alternatives more economically attractive
- Government incentives under schemes like FAME II
- Growing e-commerce and last-mile delivery requirements
- Increasing environmental regulations in urban centers
- Advancements in battery technology improving range and performance
Euler Motors has established itself as a leading player in the electric three-wheelers segment in India, with vehicles designed specifically for Indian road conditions and commercial use cases.
How the Euler Motors Investment Transforms Hero’s Market Position
The Euler Motors investment represents Hero MotoCorp’s largest stake in an EV company to date. This move comes at a critical juncture in India’s automotive transition, as the country pushes toward electrification to reduce pollution and fuel imports.
Sohinder Gill, industry veteran and EV advocate, puts this in perspective: “Hero’s investment isn’t just about capturing market share; it’s about shaping the future of mobility in India. By entering the commercial EV space, they’re addressing a segment that has immediate economic benefits for operators and tangible environmental impact for cities.”
Hero MotoCorp expects the Euler Motors investment to accelerate its presence in the commercial EV space. The ₹525 crore investment is expected to be completed by April 2025, subject to necessary approvals and conditions.
For Euler Motors, founded in 2018 by Saurav Kumar, this partnership provides the resources to scale operations and accelerate product development. The company has made significant inroads with its HiLoad EV, a three-wheeler with a 688 kg payload capacity and range of up to 151 km on a single charge.
“What makes this partnership particularly powerful is the complementary strengths,” explains Ravi Sharma, an automotive supply chain consultant. “Hero brings manufacturing scale and distribution, while Euler brings EV innovation and a deep understanding of commercial vehicle requirements.”
Current State of the Indian EV Market and Growth Projections
The Indian EV market is projected to reach US$ 113.99 billion by 2029, growing at a CAGR of 66.52%. This explosive growth is supported by both government initiatives and changing consumer preferences.
For context, consider these market dynamics:
| Metric | Current Value | Projected Value | Growth Rate |
|---|---|---|---|
| Market Size (2022) | US$ 3.21 billion | US$ 113.99 billion (2029) | 66.52% CAGR |
| EV Registrations (2024) | Nearly 2 million units | – | 29% YoY increase |
| Two-Wheeler Segment | 60% of total EV registrations | – | 3x faster than traditional two-wheelers |
| Scooter Segment | 34% market share | 40% by 2030 | – |
| Charging Stations | Current infrastructure | 1.32 million by 2030 | – |
Government incentives have been a key driver of growth in the Indian EV market. The FAME India Scheme with its Rs. 10,000 crore allocation has significantly reduced the acquisition cost of electric vehicles, while import duty reductions from 110% to 15% have made components more affordable.
Competition in the Indian EV market is intensifying with both traditional manufacturers and new entrants. Market leaders Ola Electric and Ather Energy currently hold approximately 60% combined market share in the electric two-wheeler segment, while traditional players like Hero MotoCorp, Honda, and TVS Motor Company are accelerating their electric vehicle programs.
“We’re at an inflection point in India’s mobility transition,” says Anjali Jain, an energy transition researcher. “The next five years will determine which companies lead the electric future, and Hero’s moves suggest they’re determined to be at the forefront.”
Hero’s Comprehensive Electric Vehicle Strategy Beyond Two-Wheelers
Hero MotoCorp’s electric vehicle strategy includes building a comprehensive ecosystem beyond just vehicle manufacturing. The company is developing an integrated approach that encompasses:
- Product Portfolio Expansion: Moving beyond two-wheelers into commercial vehicles
- Charging Infrastructure: Establishment of 3,100 fast charging stations
- Service Network: Development of 500 service points
- Technology Partnerships: Collaborations with global technology providers
- Manufacturing Capabilities: Leveraging existing facilities for EV production
A successful electric vehicle strategy requires investments across the value chain, from manufacturing to charging infrastructure. Hero’s approach acknowledges this reality, with significant resources allocated to building a complete ecosystem rather than focusing solely on vehicle development.
Niranjan Gupta, CEO of Hero MotoCorp, has expressed optimism about the EV transition, expecting 50% of scooters to be electric in the mid-term. This aligns with industry projections that see the scooter segment growing from 34% to 40% of the overall two-wheeler market by 2030.
The company’s electric vehicle strategy aims to position it as a leader in sustainable mobility solutions, leveraging its unparalleled distribution network and brand recognition while embracing new technologies and business models.
Revolutionizing Last-Mile Connectivity EV Solutions in Urban India
Last-mile connectivity EV solutions are crucial for reducing urban congestion and pollution. The three-wheeler segment plays a particularly important role in this ecosystem, providing efficient transportation for both people and goods in crowded urban environments.
Euler Motors specializes in last-mile connectivity EV products for commercial applications. Their vehicles are designed specifically for Indian conditions, with features like:
- High payload capacity (688 kg)
- Extended range (up to 151 km)
- Fast charging capabilities
- Telematics and fleet management systems
- Low maintenance requirements
The investment will accelerate the development of innovative last-mile connectivity EV solutions. By combining Hero’s manufacturing expertise with Euler’s EV technology, the partnership could produce vehicles that address the specific needs of India’s diverse commercial transportation market.
“The last-mile delivery sector is ripe for electrification,” explains logistics consultant Priya Menon. “The economics already make sense – electric three-wheelers have lower operating costs than their diesel counterparts. What operators need is reliability, service support, and financing options, which this partnership is well-positioned to provide.”
The Future of Electric Three-Wheelers in India: Market Potential
The future of electric three-wheelers in India looks promising with increasing adoption for commercial purposes. These vehicles are particularly well-suited for:
- E-commerce deliveries
- Grocery and food delivery services
- Urban passenger transportation
- Municipal services
- Warehouse and campus logistics
Government policies are shaping the future of electric three-wheelers in India through incentives and infrastructure development. The FAME II scheme provides specific subsidies for commercial electric vehicles, while many states offer additional incentives like road tax exemptions and permit fee waivers.
Last-mile delivery services are driving the future of electric three-wheelers in India. With e-commerce expected to reach US$ 350 billion by 2030, the demand for efficient, cost-effective delivery solutions will continue to grow, creating a substantial market for electric three-wheelers.
“What’s particularly exciting about the three-wheeler segment is that the economic case for electrification is already compelling,” notes Rahul Sharma, an electric mobility researcher. “The total cost of ownership is lower than for ICE vehicles, even without subsidies. As battery costs continue to decline, this advantage will only increase.”
Impact of Hero MotoCorp on Indian EV Market Following This Acquisition
The impact of Hero MotoCorp on Indian EV market is expected to grow with this strategic investment. As India’s largest two-wheeler manufacturer enters the commercial EV space, it brings significant manufacturing capabilities, brand recognition, and distribution networks that could accelerate adoption.
Industry experts are analyzing the potential impact of Hero MotoCorp on Indian EV market following this acquisition. Most see this as a significant development that could influence other major automotive players to accelerate their EV strategies.
“Hero’s move validates the commercial EV segment,” says automotive industry analyst Vikram Gulati. “When a company with Hero’s manufacturing expertise and scale enters a market, it typically leads to faster technology development, cost reductions, and ultimately, broader adoption.”
The long-term impact of Hero MotoCorp on Indian EV market will depend on how effectively it integrates Euler Motors into its strategy. Success will require balancing Euler’s startup agility and innovation with Hero’s manufacturing discipline and scale.
For consumers and fleet operators like Suman Mishra, the partnership promises better products, more reliable service, and potentially more affordable electric vehicles.
“I’m looking forward to seeing what they develop together,” says Mishra. “If they can deliver reliable vehicles with good range and payload capacity, backed by Hero’s service network, it would make the decision to go electric much easier for businesses like mine.”
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Frequently Asked Questions About Hero MotoCorp’s EV Investment
What exactly is Hero MotoCorp investing in?
Hero MotoCorp is investing ₹525 crore to acquire a 32.5% stake in Euler Motors, an electric three-wheeler manufacturer. The investment will be made through a combination of equity shares and Series D compulsory convertible preference shares (CCPS).
How does this investment fit into Hero’s overall EV strategy?
This investment expands Hero MotoCorp’s EV portfolio beyond two-wheelers into the commercial vehicle segment. It’s part of a comprehensive strategy that includes developing an EV ecosystem with charging infrastructure (3,100 planned charging stations) and service networks (500 service points).
When will the investment be completed?
The investment is expected to be completed by April 2025, subject to necessary approvals and conditions.
What are the advantages of electric three-wheelers for commercial use?
Electric three-wheelers offer several advantages for commercial applications:
– Lower operating costs (approximately 40-50% less than diesel alternatives)
– Reduced maintenance requirements due to fewer moving parts
– Zero tailpipe emissions, helping businesses meet sustainability goals
– Lower noise pollution, important for early morning or late night deliveries
– Government incentives that reduce acquisition costs
How big is the electric three-wheeler market in India?
The electric three-wheeler segment represents approximately 45% of all EVs sold in India, with over 900,000 units currently on the road. The segment is growing at approximately 20% annually, driven by commercial and logistics applications.
Will Hero develop new electric three-wheeler models?
While specific product plans haven’t been announced, the investment suggests Hero will leverage Euler’s existing product portfolio while potentially developing new models that combine Euler’s EV expertise with Hero’s manufacturing capabilities.
How does this investment affect competition in the EV market?
This move intensifies competition in the electric commercial vehicle segment, potentially accelerating innovation and price competition. It may also prompt other major automotive manufacturers to make similar investments or acquisitions to secure their position in the growing EV market.
As the sun sets over Hero MotoCorp’s headquarters, the significance of this investment extends far beyond corporate boardrooms. For fleet operators like Suman Mishra, mechanics learning to service electric vehicles, and millions of Indians breathing polluted air in urban centers, this partnership represents a tangible step toward a cleaner, more sustainable transportation future.
The Hero MotoCorp investment in Euler Motors marks its entry into the electric three-wheeler segment, diversifying beyond its traditional motorcycle business into the rapidly growing commercial EV space. Through this strategic move, Hero aims to position itself as a comprehensive mobility provider in India’s evolving electric vehicle landscape.
As India works toward its ambitious climate goals and urban centers grapple with pollution challenges, partnerships like this one between established manufacturers and EV innovators will play a crucial role in accelerating the transition to sustainable mobility. The road to electrification is long, but with each strategic investment, the journey accelerates.
