India’s largest electric two-wheeler manufacturer, Hero Electric has announced a strategic pact with Mahindra Group on January 19 to produce electric bikes collaboratively. The deal is for a tenure of 5 years and the value of the transaction is estimated to range from Rs. 140 to Rs. 150 crores over the contract period.
Reports suggested that EV sales in India grew 240 % in December 2021. Therefore, this collaboration is the resultant of the high records achieved by EV sales in India and the resultant rising demand for electric vehicles. The consolidated product development, knowledge sharing in electric mobility space, and the development of standards of electrification of Peugeot Motorcycles’ Portfolio that was secured by Mahindra Group in 2019 through the platform sharing are also included in this decisive covenant.
Naveen Munjal, MD, Hero Electric, said, “Hero Electric has been leading the electric two-wheeler sector in the country. To further deepen its roots and strengthen its leadership, Hero Electric has announced a partnership with the Mahindra Group, which is leading the EV transition in the electric three and four-wheelers space. This coming together of two industry leaders is to further enhance the manufacturing capabilities to meet demand and utilize Mahindra Group’s robust supply chain to reach newer centers in the country. The long-term partnership will also see both the companies make the most out of each other’s deep knowledge of EVs and drive new product development in the next few years. We look forward to creating more synergies with them in the near future.”
In that event, Mahindra will manufacture Hero Electric’s two sensational electric bikes- Optima and NYX at Mahindra’s Pitampura plant. Thus, Hero Electric currently having a 36 % share in the EV two-wheeler market will be able to mass-produce over 1 million EVs per year by 2022 along with the amplification of the Ludhiana plant owned by Hero Electric. Also, M & M will be able to earn huge extra revenue in the event of the decline of auto sales.
Rajesh Jejurikar, Executive Director, Auto, and Farm Sectors, Mahindra & Mahindra, said, “Peugeot Motorcycles has ambitious plans in the EV mobility space in several regions of the world and particularly in Europe. This strategic partnership will bolster these efforts through joint development and a platform-sharing approach leveraging the combined strengths of the two businesses. Our R&D Centre in India will be integral to this arrangement as will the manufacturing facility at Pitampura, which already supplies Peugeot with EV products. I see significant value creation on a mutually beneficial basis and look forward to this partnership delivering on its obvious promise.”
This partnership assures that the consolidated effort on this venture will be done by dealing with the Indian and Global markets that will eventually help in the growth of electric vehicles.