yamaha: Hero Motors, Yamaha form JV to produce e-cycle drive motors
Yamaha is understood to be taking a minority stake initially and will eventually scale it up, say sources.
Hero and Yamaha will be captive consumers as they have been manufacturing and selling e bikes since years, say experts.
Hero Motor has been working towards forging joint ventures for the critical electric drive unit components to localize the components and reduce import dependency as well as boosting “Make in India” initiative to attract export orders, especially given the strained supply chains from China, in the post Covid scenario.
The company , the largest integrated bicycle manufacturer in the world, has laid out aggressive plans to expand their electric bicycles business, globally.
The bicycle market in India is valued at USD 0.9 billion with 15 million bikes a year. In 2020, European bicycle market was valued at USD 8 billion and it is expected to reach USD 17 billion by 2026, projecting a CAGR of 13%. Whereas, the Indian electric bicycles market, where the growth lies, is valued at USD 0.1 billion, a fraction of the European market.
Being the market leader in conventional push bicycles, Hero pioneered the electric bicycle market spearheading the revolution in the personal smart e-mobility segment which is even more relevant in these times as it caters to sustainability, physical fitness, personal security and affordability.
The electric bicycles are traditional-looking bicycles with pedals, but the rider can choose to be aided by an electric motor using lithium-ion battery technology, as in Electric Vehicles. The growing popularity of this mode of transportation, especially in European countries is mainly due to the fact that they use very little electric power compared to other vehicles like cars or motorcycles. These pedal electric bicycles or ‘pedelecs’ have become an integral part of future urban mobility.
The electric bicycles are not only environment friendly but also pocket-friendly. They do not require a vehicle registration thus the ownership cost is low, and since they require minimal maintenance, and run on electricity, combined with human effort, the running cost is also very low. They even do not require a driving licence. These make them an attractive option compared to petrol-powered alternatives like motorcycle or scooters and have enabled the electric bicycle to become a very popular substitute for the second car among the European families. In addition to the lower operating cost, they are lightweight, agile and the 25 km/h speed is adequate for city commutes. The major downside of other types of EVs – the range anxiety is also absent in the electric bicycle as the rider can always use it like a normal bicycle and pedal it to the destination.
In addition to being environment friendly, electric bicycles are also good for personal fitness. According to a study of scientists at Switzerland’s University of Basel, riding an electric bicycle is just as good as regular bicycles for fitness point of view, while also helping to cover extra miles.
The demand for electric bicycles increased after the outbreak of pandemic COVID-19, as the consumer preference changed from public transport towards personal vehicles and electric bicycles came out as an economical option for people, which boosted the demand.
Having introduced the electric bicycle product to the Indian market through the Hero Lectro brand, HMC went on to acquire globally renowned premium electric bicycle brands like HNF, Insync in European market. In addition to the expansion of the brand network, HMC is strengthening its back-end with equally rapid pace. “Lower import duties are the need of the hour and will help increase exports. To compete against the least developed countries (LDCs) and GSP countries enjoying zero import duties and to remain globally competitive, it is very essential that India negotiates trade deals to bring down the import duties on bicycle to the level of LDC & GSP countries i.e., zero per cent from existing 14 per cent,” said Pankaj Munjal, CMD, Hero Cycles.
HMC has recently expanded its manufacturing operations in Punjab that will add 4 million units’ capacity, including 0.5 million units of E-Cycles.