InvestorQ : Why has Hero Motor decided to put off its EV launch from July?
Rashi Mehra made post

Why has Hero Motor decided to put off its EV launch from July?

Archita Jajjoo answered.
1 month ago

In a move that was largely anticipated, Hero Moto has decided to put off its EV launch from July to the year-end festive period. After Hero invested in Ather Energy, the idea was to leverage this acquisition and fast track its EV launch. It had also announced its EV launch under the Vida banner. While the final date of the launch is yet to be announced, it is now most likely to coincide with the spending season which normally begins in October around Dussehra and extends to the end of the year around the Christmas Shopping festival.

The big challenge to Hero Moto was the microchip shortage, since it is a core product in its EV offering. The world is still undersupplied with microchips and Hero Moto did not want a situation wherein it would be stuck without supplies of key inputs. More so, since Hero Moto has been traditionally known for its customer centric approach in the two-wheelers business. They did not want their production schedules to be disrupted by the chip story.

There are more reasons for tweaking the launch date to around the festive season. For instance, during this period, there are normally a number of companies that launch new products to coincide with the festive season. That is also the time when people have a high propensity to spend and hence credit is also available very easily. This period is very conducive to the new launch of products like consumer durables, new vehicles and white goods are purchased also because it is considered auspicious.

There is also a safety angle to this story. Recently, there have been several cases of fire in EV scooters. Hero Moto, with its strong emphasis on creating a high-quality product with high safety standards, wanted to be doubly sure. Several models like Pure EV, Boom Motors, Ola Electric etc were forced to recall batches of products after such fire incidents were reported. For Hero Moto, the delay in the EV is also an opportunity to get its safety fool proof.