Hero Motocorp decides to put off its EV launch

by 5paisa Research Team Last Updated: Jun 03, 2022 - 10:21 am 26k Views

One of the grand plans of Hero Motocorp in the last few months was to leverage its investment in Ather Energy to fast track its EV launch. Very recently, Hero Moto had announced that its electrical vehicle (EV) would be launched under the “Vida” brand in the month of July 2022. However, now Hero Moto has announced that it was putting off the launch of the Vida from July to a later date. The final date is yet to communicated.

While the company has not exactly confirmed the timing of the launch, market reports suggest that the actual launch could happen in October or November this year. Hero Moto may look to coincide the launch of the electric scooter with the Indian festive season later this year.

Normally, the festive season starts around October during Dussehra and extends all the way to the end of year for the Christmas shopping festival. Hero Moto has been known for its customer centric approach to manufacturing and selling two-wheelers.

The company had been apprehensive that the currently supply chain disruptions caused by the war and the existing microchip shortage could disrupt production and supply schedules. Hero Moto is not keen to start production and announce the launch of its electric scooters unless there is clarity on this front. The reasons are not hard to fathom.

The ongoing geopolitical flux caused by the war in Ukraine and the COVID restrictions imposed by China have created enormous supply chain issues, including the acute shortage of various components. One of the major casualty has been the semiconductor shortage in the world amidst huge demand supply mismatch caused in the last few years. Hence Hero Moto has sought to postpone the launch.

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There are a number of companies that launch products around the year end festive season and that is also the time when credit is available easily and cheap. Normally, it is the festive period that witnesses a spurt in sales; and this has been the trend in India between October and December. This is the period when a lot of the consumer durables, new vehicles and white goods are purchased also because it is considered auspicious.

There is one more perspective to this decision to delay the launch. There have been several cases of fire in EV scooters endangering the lives of the drivers. Hero Moto has a strong emphasis on creating a high-quality product that is extremely high on safety.

Also, Nitin Gadkari has issue a warning to EV makers not to compromise on the quality and safety features, especially the features that could endanger the users.

There are several instances from across the world. For example, Pure EV, Boom Motors, Ola Electric and Okinawa have recalled several batches of their products after incidents of these vehicles catching fire were reported.

Hero Moto is of the view that delaying the launch will allow the company to tide over the chip shortage situation and also ensure that the safety features of their product are largely fool proof. In a way, for Hero Moto, the delay in the EV is like hitting two birds with one stone.

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