By Pritish Raj
Buoyed by the government's push for electric vehicles via sops in the Budget and other subsidies, Hero Electric is planning to increase its production capacity manifold, while also expanding its dealer network by adding nearly 400 outlets this financial year. The company is in the final stages of scouting for land in Karnataka and Tamil Nadu for a new manufacturing plant, which will have a production capacity of around 4 lakh units per annum, with the hope that the demand for eco-friendly products will nearly double in the next few years. Currently, the company has a production capacity of around 1 lakh units in Ludhiana, Punjab, and a network of 600 dealers.
Naveen Munjal, managing director of Hero Electric, said with the government aiming for about 100% electrification of two-wheelers by 2025, he is hoping that the right policies will come through. “We are gearing up for much larger production and if the complete conversion by 2025 happens, we would need much more capacity,” Munjal told FE.
Think tank Niti Aayog has proposed to convert all two-wheelers running on internal combustion engine to electric by 2025 — a move that has given a significant boost to the EV industry and, at the same time, received massive criticism from incumbents like Bajaj Auto and TVS Motor. Rajiv Bajaj, MD of Bajaj Auto, and Venu Srinivasan, chairman of TVS Motor, have termed the move impractical and unrealistic, as the conversion may lead to job losses and undermine ‘Make in India’ initiative.
On the other hand, EV start-ups have hailed the decision vouching for its ability to lead to cleaner form of mobility and also check on oil imports. Munjal argued that six years are enough for any industry to adopt a change and that big companies also need to think about the rising pollution and ballooning oil imports. “These companies have also enjoyed substantial gains in the past, and the transition is not happening overnight. There will be employment generation and the supply chain will be built for EVs as well,” Munjal said.
Stating that no company would want a disruption of this scale, Munjal said they would try and do as much as possible to preserve their industry. “But the fact is we have a lot of issues and change is required,” he added. Electric vehicles currently account for less than 1% of the total units sold in India, with charging infrastructure being the main deterrent. Among two-wheelers, while the industry sells over 2 crore units, EV sales in India is roughly around 70,000 units, out of which Hero Electric sells around 40,000 units.
According to Munjal, conversion of two-wheelers to electric mode is the easiest thing to do as there are multiple options like battery-swapping or charging facility at home. “There is no need of a separate charging station and India has enough electricity and power to meet the demand emerging out of the two-wheelers,” he noted.