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Hero Electric, India’s largest maker of electric two-wheelers, and the Mahindra Group on Wednesday announced a non-equity collaboration for development, contract manufacturing and joint parts sourcing for electric two-wheelers.
Hero Electric and Mahindra and Mahindra (M&M) will enter into a five-year contract with scope to enhance the area of collaboration in future. Over the contract period, the value of the transaction is expected to be in the range of ₹140–150 crore.
The partnership will see M&M lend its factory in Pithampur, Madhya Pradesh for production of Hero Electric’s models such as Optima and NYX. There will be joint development and knowledge sharing between the companies in addition to electrification of Peugeot Motorcycles portfolio through platform sharing. M&M will also utilise its supply chain to help Hero Electric reach newer centres in the country.
With this collaboration along with the expansion of its existing Ludhiana facility, Hero Electric will be able to meet its demand of manufacturing over 1 million EVs per year by 2022.
Naveen Munjal, Managing Director, Hero Electric, said, “Hero Electric has been leading the Electric two-wheeler sector in the country. To further deepen its roots and strengthen the leadership, Hero Electric has announced a partnership with the Mahindra Group, which is leading the EV transition in the electric three and four wheelers space.”
The joint development efforts will also be a key factor in developing the platform approach to help electrification of the Peugeot Motocycles’ portfolio. This is expected to bring significant value to both parties through optimization of costs, timelines, and shared knowledge in this dynamic, fast growing global EV environment, M&M said in a release.
Rajesh Jejurikar, Executive Director, Auto & Farm Sectors, Mahindra & Mahindra, said, “Peugeot Motocycles has ambitious plans in the EV mobility space in several regions of the world and particularly in Europe. This strategic partnership will bolster these efforts through joint development and a platform sharing approach leveraging the combined strengths of the two businesses.”
“Our R&D Centre in India will be integral to this arrangement as will the manufacturing facility at Pitampur, that already supplies Peugeot with EV products,” Jejurikar added.
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