electric fight between the Munjals
there is a fight brewing between the Munjal families over electric two-wheelers. Naveen Munjal from Hero Electric has said that he will push back if his uncle Pawan Munjal enters the electric two-wheeler space.
curiously, there are two separate companies — Hero Electric and Hero MotoCorp. in 2010, the two families drew up an agreement where they divvied up the massive multi-billion dollar empire into various business verticals. this split came with conditions. Hero MotoCorp, which would be owned by Pawan Munjal, would deal in internal combustion engines. you know, regular scooters. Hero Electric would be Naveen Munjal’s. these two would have exclusive rights on the name. so, a clause in this very elaborate agreement was that if one ventured into the sector of the other, they would not be allowed to use Hero as a brand.
Reports trickling out say that Hero MotoCorp is going to make a foray into the electric two-wheeler industry in partnership with Taiwan-based auto manufacturer Gogoro. that too this financial year. it won’t do just scooters, it may also manufacture batteries and charging stations. this has not gone down well with Naveen. he has now gone public to remind his uncle of the family agreement.
for one, it’ll be confusing. what are you buying? each company will feel the other is poaching its customers. the other - as a market, electric scooters, is remarkably small. there is huge potential for growth but in 2020, just over 25,000 scooters were sold in the entire country. Hero Electric sold the most with around 8,000. Ola, too, has now entered this niche segment. in fact, Ola has raised debt worth $100 million to fund its foray into electric scooters. this makes it all very tight and is causing both the Munjals to bristle.
for Hero MotoCorp, entering electric scooters is a natural progression and Pawan Munjal has said that his company will take legal advice before taking the next step. the electric vehicle space is going to get hot, in more ways than one.