Hero Electric Vehicles has announced that it will invest ₹700 crore to expand its business by 2025. This will include setting up of a new manufacturing unit and for this, the company has raised ₹220 crore to part-fund the activities.
Hero Electric is also planning to set up a new manufacturing facility with an annual capacity of 10 lakh units. The company wants to increase production at its current plant located in Ludhiana to three lakh units each yea from its current capacity of 75,000 units as it aims to sell around 10 lakh units a year by 2025-26. In addition to this, the brand is ramping up research and development (R&D), marketing, expanding its supply chain and service network, increasing dealer network and charging stations.
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To grow in the electric two-wheelers segment after observing the upward demand trend managing director of Hero Electric, Naveen Munjal, says that the manufacturing facility will soon be in reality. "The Electric vehicles market has undergone tremendous change over the last few years since we raised our first round of funding. The policies are extremely conducive for the growth of the segment and despite the pandemic, the company is poised to grow at over 2X from the last fiscal," he said. "Hero aims to sell over one million units per year in the next couple of years.
To fund these activities, the company has raised fresh capital in the form of part 1 of Series B funding of ₹220 crore, led by Gulf Islamic Investments (GII).
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Munjal also stressed that Hero Electric is preparing for the exponential growth in sales that it expects going forward, with the FAME II scheme increasing support for electric two-wheelers thereby accelerating demand.