Pankaj Munjal, Managing Director of Hero Cycles Ltd, has stated that Hero Motors is planning a major push toward electric vehicles over the next three years. According to reports, the company plans to invest Rs 1,500 crore to establish itself as a mainstream player in the expanding EV components sector by 2026. According to the Economic Times, Hero Motors has raised growth equity capital for a 10% stake from a private equity firm, GEF Capital Partners and its partners. As part of the new EV venture, new manufacturing plants will be established in India and Thailand.

According to the report, the EV component manufacturer has already begun supplying EV gearboxes to luxury automakers such as BMW, McLaren, Mercedes-Benz AMG, and others. Munjal estimates that the market for EV gearboxes alone will grow to USD 2 billion per year if global demand remains stable. The sector is currently growing at an 18% CAGR.

The Rs 1,500 crore raised will be used to establish a forging facility, disc brake manufacturing unit, and gearbox manufacturing facility for BMW in Thailand. Furthermore, the manufacturer will prioritise R&D in the EV space. With everything in place, Hero Motors expects the EV parts venture to generate up to 60% of its revenue.

According to the report, HMC Group's revenue is expected to more than double from Rs 5,500 crore in the next three years, with at least three HMC entities planning to go public by mid-2024.