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

Hero MotoCorp, India’s largest two-wheeler seller, has launched a brand for its electric vehicle (EV) segment to avoid legal complexities due to the ongoing arbitration with Hero Electric over the “Hero” brand name.

Hero MotoCorp 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.

The court has not debarred 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 such as Vida, Vida MotoCorp, Vida EV, Vida Electric, Vida Scooters, and even Vida Motorcycles for its EV endeavour.

Simultaneously, Hero MotoCorp has announced a $100-million Global 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 (environmental, social, and governance) 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 chief executive officer of the company.

As part of its transition to the EV business, the company has started forming tie-ups and partnerships with other firms.

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

Similarly, it has formed a joint venture with Taiwan-based Gogoro, into which it has pumped in $285 million to develop a battery-swapping platform.

“We are approaching the world of EVs as an ecosystem rather than a product or revenue. Hence we are forging many tie-ups, besides our existing investment as we strongly believe EVs are currently about partnership and collaboration rather than competition,” said Niranjan Gupta, chief financial officer at Hero MotoCorp.

Hero’s strength from the traditional internal combustion engine business -- as in distribution, sourcing, manufacturing, or logistics -- will help to reduce investment in EVs and help to cut cost.

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

UBS expects Hero to have a 10 per cent market share in EVs in the long term, and its overall two-wheeler market share to fall from around 35 per cent currently to 32-25 per cent in FY25-30.

Hero is building a hybrid distribution strategy for EVs where it may have separate distribution outlets in metros 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.