India’s leading cycle manufacturer, Hero Cycles has revealed its plans to enter the electric vehicle (EV) market with a significant investment of 1,500 crore rupees ($206 million).
The company’s goal is to become a significant player in the EV components industry by 2026.
Pankaj Munjal, CEO of Hero Cycles said that the market for EV gearboxes alone could reach $2 billion annually and grow at a compound annual growth rate of 18%.
In order to become a significant player in the EV components sector by 2026, Hero Cycles will be establishing manufacturing plants in India and Thailand.
The company has already started supplying EV gearboxes to luxury automakers such as BMW, Mclaren, and Mercedes-Benz AMG.
The 1,500 crore rupees that have been raised will be used to set up a forging facility, a disc brake manufacturing unit, and gearboxes for BMW in Thailand, as well as to increase research and development efforts in the EV industry.
Hero Cycles is a company that is primarily known for manufacturing bicycles and motorbikes. However, it is now venturing into the electric vehicle (EV) market and anticipating that this new business will become a significant source of revenue for the company.
The company is projecting a turnover of 5500 crore rupees (about $765 million) in the next three years from this venture and expects that up to 60% of its revenue will come from this business.
To support this expansion, at least three of Hero Cycles’ entities are planning to go public through initial public offerings (IPOs) by mid-2024.
This move into the EV market represents a significant shift for Hero Cycles as it looks to diversify and expand its business in response to the growing global demand for EVs.