Electric vehicle spark fires up R&D spending by legacy two-wheeler majors

Hero MotoCorp and TVS Motor crossed Rs 1,000 crore in R&D spend for the first time, as legacy OEMs accelerate innovation to compete with new-age EV players

Fuelled by the electric vehicle (EV) revolution, a sharper technology focus, and an appetite for global reach, Indian legacy two-wheeler giants — Hero MotoCorp, TVS Motor Company, Eicher Motors, and Bajaj Auto — have thrown open the throttle on research and development (R&D) spending. In five years, their outlays have soared, mirroring the turbulence of a market shaken by newer names like Ola Electric, Ather Energy, and Greaves Electric.

 

Market leader Hero MotoCorp and TVS Motor, which has been making waves this year with

its iQube EV, have both breached the ₹1,000 crore mark in innovation expenditure.

Together, the four companies spent ₹3,304 crore on R&D in 2024-25 — a 107 per cent rise from ₹1,595 crore in 2020-21. Their innovation now extends well beyond engines and chassis, stretching into improving customer experience through digitisation and sustainability.

 

Chennai-based TVS Motor especially stands out: Between FY21 and FY25, its R&D bill jumped 210 per cent, from ₹331 crore to ₹1,025 crore. “Our focus on R&D drives our ambition and growth. In 2024-25, we invested over ₹1,000 crore in research and innovation. This is the first time we have crossed such a landmark. There are over 2,000 engineers working on many industry-first and segment-first interventions. Our ambitious teams will continue to shape future mobility, delivering intelligent technology at every customer touchpoint,” said Ralf Speth in his final speech to shareholders as chairman last Friday. Taking the baton on Monday, Sudarshan Venu, a major advocate of TVS Motor’s EV innovations, formally stepped in as chairman and managing director.

 

For perspective, the company’s innovation budget was just ₹99 crore in 2009-10. 

 

TVS is now exploring augmented reality (AR) as the next-generation interface for riders. Its latest annual report details conceptual work on AR-enabled head-up displays (HUDs) built into windscreens, capable of throwing up real-time navigation overlays, blind spot alerts, range estimates, and even live charging station availability.

 

“Our legacy two-wheeler players are churning up new models and innovations regularly. They are making new products for not just India, but for international markets too. As the future is in EVs, a major part of their expense is in developing new technologies and models in this space,” observed Anurag Singh, advisor, Primus Partners.

 

Hero MotoCorp, meanwhile, revved up its R&D expenditure by 93 per cent to ₹1,040 crore during the period under review. The leap looks even starker against its FY10 spend of just ₹30 crore -- a 33-fold surge. “Going forward, we are using technology for the development of our products in R&D, and addressing all quality issues at 360 degrees -- whether it’s the quality of customer experience, quality of manufacturing, or quality of design. All areas we are strengthening ourselves very well,” said Vikram Kasbekar, Hero’s chief executive officer, in an address to shareholders earlier this year. It clocked ₹1,036 crore in FY16, and dipped after that before touching record numbers in FY25.  

 

In FY25 alone, the company filed more than 170 patents, many powered by AI-driven design optimisation and simulation. Hero is also overhauling product lifecycle management (PLM) to centralise bills of materials, project timelines, and supplier collaboration. Its innovation hubs span the Centre for Innovation and Technology (CIT) in Jaipur to the Hero Tech Centre Germany (HTCG) in Munich.

 

Bajaj Auto saw its R&D spend climb 47 per cent to ₹626 crore in FY25. The company is investing in its own powertrains, controllers, human-machine interface systems, connectivity, and layered value-added features, with the aim of making them affordable and scalable. It was the only Indian two-wheeler original equipment manufacturer (OEM) already running a three-digit R&D budget in FY10, at ₹135 crore.

 

Royal Enfield-maker Eicher Motors is plotting its own bold leap. Ahead of the much-anticipated launch of its first EV — the Royal Enfield Flying Flea C6 in 2026 — it has doubled its R&D budget. The figure was ₹299 crore in FY21; it rose to ₹613 crore in FY25. In contrast, the allocation was ₹11 crore in calendar year 2010.

 

This R&D surge by legacy titans is unfolding against a backdrop of new-age players flexing their war chests. Ola Electric has set aside ₹1,600 crore for innovation between FY25 and FY27. Ather Energy has already ploughed in around ₹520 crore over FY22-24, with more to come.