This fresh round of funding for the electric two-wheeler maker comes after two-and-a-half years since it raised its maiden funding of Rs 160 crore from Alpha Capital in December 2018.
Hero Electric will use the fresh funding to expand its manufacturing capacities, increase R&D spend, invest in futuristic technology and grow its footprint.
Naveen Munjal, managing director of Hero Electric said - "Hero is committed to its mission of ‘no emission’ and build a sustainable future that is electric. The company plans to double sales every year, and set up multiple plants over the next few years. It aims to sell over one million units every year over the next couple of years."
On the other hand, In April, Hero Electric's big brother Hero MotoCorp joined hands with Taiwan’s Gogoro to develop Hero-branded electric vehicles (EV's) for the Indian market. Hero MotoCorp has also been working independently on EVs at its R&D facilities. The first of Hero MotoCorp’s EVs are set go on sale before March 2022 under the ‘Hero brand’.
Naveen Munjal said they are ready to fight uncle Pawan Munjal-led Hero MotoCorp if it enters the electric two-wheeler space under its namesake brand. He said - "It was a surprise to us when Hero MotoCorp announced its plans to come out with electric two-wheelers under the Hero brand. We will take all necessary steps available to us at that point in time should something like that happen. There are no back-channel talks within the family on this"
“Environmental products, green vehicles and electric vehicles; those remain with us. Should anybody venture into, we will have to take our own necessary steps, whatever that is available to us by law. We are very clear on not just the spirit of the agreement but even the wording of the agreement. There is no ambiguity on it.” Munjal added.
This will be an interesting space.
Hero started off as a cycle manufacturer. And they were already quite big when they went into the JV with Honda. Being a joint family, the brand ownership has been an issue. They had decided that 3 branches of the family will share the Hero brand - for three exclusive product categories: cycles, ICE vehicles and electric vehicles. The smallest of the three categories is the EV. (Incidentally, the cycle guys were allowed to create an electric brand of their own which uses Hero, but the motorcycle guys were clearly not.) Hero Motorcorp has realized that it cannot survive without electric. They started off by investing in Ather and now Gogoro - but have now thought that they need to make their own presence felt. They have a choice: they can go the Bajaj way - and give importance to the sub-brand like Maestro EV or Splendor EV. Or they can negotiate with lil bro - and give him some cash - and start using the Hero brand too. Lil Bro (Hero Electric) has started flexing his muscle by getting outside investors at fancy valuations. Best option for Hero Motocorup is that they buy out Hero Electric - because the quality that Hero Motocorp stands for and the quality of Hero Electric are not really in sync. Watch this space to see how the family saga unfolds!