NEW DELHI: Electric two-wheeler maker Hero Electric believes 2021 is going to be a disruptive year for India’s auto sector because the electric vehicle segment—even though it was severely impacted by the Covid-19 lockdowns—is set to grow exponentially. The company expects substantial growth this fiscal year and is confident of doubling its current volumes by FY2022.
“We estimate that the electric two-wheeler market will be 10-20 per cent of the ICE market in the next five years. Even at the lower level of 10 per cent, the market will expand to 2 million units per annum. If it goes to 20 per cent, around 4 million units will be sold a year. So, irrespective of which way we look at it, we are looking at exponential growth happening in the coming years,” Naveen Munjal, MD, Hero Electric told this publication. At present, share of EVs in total vehicle sales in India is less than one per cent.
Munjal said this segment gained traction once it switched to lithium-ion batteries from the older lead-ion ones. “What has happened now is that despite a price hike, there is traction... Everyday new ventures are coming up in different segments, from making batteries to procuring raw materials. Now, it has started
making economic sense because there is scale... I believe the next two-three years is going be highly disruptive,” he added.
Hero, which commands one-third of the electric two-wheeler market, has serious expansion plans amidst increasing competition. “We have to expand because we are running out of capacity. The quantum of that investment is going to be substantial. This year we will be making around 55,000-60,000 units. The immediate expansion will take our manufacturing capacity to 2.5-3 lakh units per annum and in the next phase it should reach to 5-6 lakh units,” he said. Munjal, however, did not disclose the size of the investment.