Hero Electric, the largest manufacturer of electric two-wheelers in the country, expects to become profitable by FY18 on the back of three new product launches and subsequent increase in sales volumes.
Currently, the company has a turnover of R100 crore and has 75% market share in the electric two wheeler segment but due to lack of substantial subsidy from the union government it couldn’t make much in terms of improving volumes and finances. Though the announcement of subsidy for electric vehicles in the last Budget did help the company, the impact on volumes will be seen from FY18.
The New Delhi-based company is expected to launch three products with lithium battery and the management is describing the new products as One plus on performance since the performance of the new vehicles will be as good as the ones that run on petrol.
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Though the new products will be expensive (around R80,000- 1 lakh) due to the high cost of the lithium battery, Hero Electric’s CEO, Sohinder Gill thinks that it will increase the revenues of the company. Till date Hero electric has sold 1,45,000 vehicles in the domestic market.
“We are calling the new vehicles complete transportation solutions. This year the total sales of electric two-wheelers will be around 18,000 -20,000 units and next year that number will double to 40,000 to 45,000. So we expect to break even by FY18,” added Gill.
At present, Hero Electric has 300 dealerships which will be increased to 360 dealerships by the end of the of FY 18 and service stations will be increased to 450 from the current strength of 400.