Hero MotoCorp Taps Taiwan’s Gogoro in Shift to Electric
(Bloomberg) -- Hero MotoCorp Ltd., the world’s biggest maker of motorcycles, will adopt Gogoro Inc.’s battery-swapping technology as its bikes go electric, betting on a shift to clean-energy vehicles in India and other potential growth markets.
Hero and the Taiwan-based electric-scooter startup, backed by former U.S. Vice President Al Gore, will form a joint venture and build battery stations across India, where two-wheelers are a common form of transport for many of the nation’s 1.3 billion people.
“The Indian market today is very nascent as far as electric goes,” Hero Chairman and Chief Executive Officer Pawan Munjal said in an interview with Bloomberg on Wednesday. “When it happens, we will not know what hit us. And I know it’s going to happen very soon.”
Munjal and Gogoro CEO Horace Luke didn’t disclose how much they plan to invest in the battery-swapping venture or when the first joint electric two-wheelers might be ready for sale, saying only they were “men in a hurry” and details would be worked out in the coming months.
The EVs will initially be sold first in India before sales expand overseas, Munjal said, pointing to Hero’s established markets in Africa and Latin America as likely starting points. He said government support might be needed to incentivize people in India to buy the jointly-developed models, which would likely be more expensive than the majority of two-wheelers flitting around the country’s crowded streets.
India’s total sales of two-wheelers stood at 1.5 million units last month, while for the fiscal year through March they amounted to 15.1 million, according to the Society of Indian Automobile Manufacturers. Hero’s sales accounted for more than a third of the total in both March and the fiscal year.
The switch to electric is moving faster for two-wheelers than any other form of road transport, according to BloombergNEF, which estimates that global sales of motorbikes, scooters and mopeds topped 25 million in 2020. That represents about 35% of total sales of two-wheeled vehicles.
“Given the need for personal transportation, what other option is there than to do something sustainable and better for the environment?” Gogoro’s Luke said.
EV ambitions are growing in India, where Ola Electric Mobility Pvt plans to spend $30 million building the world’s biggest electric scooter “mega-factory” outside Bangalore. If all goes to founder Bhavish Aggarwal’s plans, the plant will be producing 15% of the world’s e-scooters by mid-2022.
The coronavirus pandemic has proved a challenge as it continues to spread rapidly in India with more than 200,000 new cases a day. Hero said Tuesday it was suspending operations at all of its facilities in country for four days as the South Asian nation grapples with the surge in infections.
For Gogoro, the partnership helps it achieve a long-held ambition of entering busy markets around Asia after struggling to break out of its Taiwan base, where it was founded in 2011. The company is coming off a tough year, with domestic sales of scooters dropping 46% to just over 78,000 in 2020.
The deal with Hero represents a return to one of Gogoro’s founding goals of focusing on supplying its battery-swapping and management systems for an established manufacturer rather than making scooters itself.
The company has been under pressure to deliver on its promise after receiving backing from the likes of Singaporean state investment company Temasek Holdings Pte, Japan’s Sumitomo Corp., French utility Engie SA and Gore’s sustainability-focused investment firm Generation Investment Management LLP.
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