Amid arbitration with Hero Electric, Hero Motocorp launches new EV brand

India's largest two-wheeler seller Hero Motocorp has launched a new brand for its electric vehicle segment.

In order to avoid any legal complexity due to the ongoing arbitration with Hero Electric over the Hero brand name, the company has been forced to take a cautious step and launch a separate brand for its EV business.

Hero will launch its first two-wheeler scooter on July 1.

Vijay Munjal, who, along with his son Naveen Munjal, owns Hero Electric, the largest electric two-wheeler company, had moved the Delhi High Court last year against his cousin Pawan Munjal, promoter and chairman of Hero MotoCorp, seeking an injunction on Hero MotoCorp using the brand name for its upcoming electric two-wheeler products

Delhi High Court hasn’t barred the company from using the Hero brand name for its electric vehicles, but has instead asked the Munjal scions to settle the dispute through arbitration.

Called Vida, the brand will house all its electric mobility initiatives.

The company has filed a patent for several names like Vida, Vida MotoCorp, Vida EV, Vida Electric, Vida Scooters and even Vida Motorcycles for its EV endeavour.

Simultaneously, Hero MotoCorp, also announced a $100 million slobal sustainability fund. The fund will aim to establish global partnerships, spearheaded by the BML Munjal University (BMU) and Hero MotoCorp, with the objective of nurturing more than 10,000 entrepreneurs on ESG solutions.

“When I see our future generations, especially my grandchildren, all I want to do is build a future of positive energy, which is clean, where everyone has something to look forward to and participate in something bigger and better. I will lead this initiative from the front," said Pawan Munjal, chairman and CEO of the company.

As part of its transition to EV business, the company has started forming multiple tie-ups and partnerships with companies so that it can take advantage of an established system.

It has already tied up with Bengaluru-based Ather’s fast-charging technology. Hero owns around 38 per cent stake in the company. A senior company executive said that both the companies are exploring synergies in developing charging infra, global business or front end adding that already there is a lot of learning which is getting cross pollinated between the two companies.

Similarly, it has formed a joint venture with Taiwan based Gogoro in which it has pumped in $285 million to develop a battery swapping platform. “We are approaching the world of EV as an ecosystem rather than a product or revenue. Hence we are forging many tie ups besides our existing investment as we strongly believe EV is currently about partnerships and collaborations rather than competition,” said Niranjan Gupta, CFO at Hero Motocorp.

Hero’s existing strength from the traditional IC engine business like in distribution, sourcing, manufacturing or logistics will help to reduce investment in EV and help to cut cost of the product.

However, a report by brokerage firm UBS Securities recently said that among its established peers like Bajaj Auto and TVS Motors, Hero remains the most vulnerable to this gradual shift from IC engines to electric.

UBS expects Hero to have a 10 percent market share in EVs in the long term , and its overall two-wheeler market share to fall from around 35 percent currently, to 32-25 percent in between FY 25-30.

Hero is building a hybrid distribution strategy for EV where it may have separate distribution outlets in metro cities as customers there may demand a certain experience and environment.

However, for tier-2 and tier-3 cities, the stores need not be any different.