Though the company has received some flak in terms of being a laggard in ICE space, they seem to put their weight on electric vehicles.
For a long term play spanning more than 5 years I am assuming that Hero has a good chance of dominating the electric two wheeler space, along with it’s 34% stake in Ather Energy. So, my valuation has a lot of bias towards the EV segment.
There are a few things that stand out wrt Hero’s EV initiatives:
- Hero decided to start from the premium segment and work its way down. This is evident in their pricing point. I perceive this as management’s commitment towards making this happen. I am also happy that they did not succumb to price war and margin erosion (need to see upcoming results for financial performance)
- The features on Vida are quite good and seem to have really introspected customer needs (regenerative braking, battery swapping, smart accelerator etc.). The key differentiation from customer POV is removable battery.
- Their partnership with gogoro could decouple charging station and battery infra while Hero can focus on that they do best – build quality 2 wheelers. Note that this is not an exclusive deal. However, Hero made a right move after looking at Taiwan.
- Viva is just launched in 3 cities. They are yet to scale their operations and dealerships. It is going to be a highly competitive market and dealership network will be a key aspect.
So far, the company seems to move in right direction in EV space. I haven’t had experience trying out any of the EV vehicles. But, from the review, Vida is not bad in the core aspect. Just some manufacturing aspects on the panel finish, alignment etc. need to be ironed out.
The market has chosen not to reward the stock and it has been declining over last 5 years. Need to see if this is a turn around in coming years, and IMO, it largely depends on their EV execution.
Disc: Invested
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