Hero Electric is bullish on the growing demand for electric two-wheelers, and the company intends to meet the exponential growth in demand by increasing production capacity, Hero Electric Managing Director Naveen Munjal said in an interview. The homegrown electric vehicle manufacturer is planning to invest ₹ 700 crore over the next 3-4 years to increase its production capacity from the current 75,000 units to 10 lakh units. In the first phase of expansion alone, production will be increased to 3 lakh units, Munjal is quoted as having said by the Times of India.
"At the current growth rate, the electric two-wheeler market will touch 20 lakh units in five years. With a little bit of a push and more favourable policies, this number could expand to 20% to around 40 lakh units a year," Munjal told the publication.
Munjal said the industry was witnessing doubling of market share each year and would corner at least 10% of the motorcycle and scooter market in five years. Hero Electric, which commands 40% of the market, will continue to keep pace with the growth.
The overall market size for two-wheelers has increased from 40,000 units in 2017 to 1.7 lakh units in 2020-21. Of this, Hero Electric accounted for 53,500 units. In the 14 years it has been in business, Hero Electric has sold 3.5 lakh electric scooters across the country. The current range of Hero Electric two-wheelers include low-speed electric scooters. With more players getting into the high-speed electric two-wheeler segment, Hero Electric said the company will continue to monitor the demand in the high-speed segment and enter only when there's sufficient demand.
Players like Ather Energy have set new benchmarks in the high-speed electric two-wheeler segment. Another EV start-up, Simple Energy is also getting ready to launch its own high-speed electric scooter which will directly compete with the Ather 450X. Amongst the mainstream players, Bajaj Auto has the Chetak electric scooter, and TVS Motor Company has the TVS iQube electric scooter, which are both high-quality electric scooters.