Can VIDA become the Ather killer? Hero’s electric strategy in urban India

Why Is Hero MotoCorp Betting Big on the VIDA VX2?

Hero MotoCorp Limited (NSE: HEROMOTOCO), India‘s largest two-wheeler manufacturer, is preparing for a crucial inflection point in its electric vehicle (EV) journey with the impending launch of the VIDA VX2 electric scooter on July 1, 2025. The move comes amid shifting consumer preferences, evolving FAME subsidy policies, and intensifying competition in the urban EV segment. The VIDA brand—still in its formative commercial stages—has already demonstrated double-digit VAHAN market share and growing recognition among first-time EV buyers.

The VIDA VX2 will be Hero MotoCorp’s most aggressively priced electric scooter yet, expected to retail under ₹1 lakh. This price tag places it squarely in competition with the Ola S1 Air, TVS iQube base variant, and some models in Ather Energy‘s lineup. As India’s electric two-wheeler market matures with rising urban adoption, this launch will test Hero’s ability to scale beyond its traditional ICE stronghold and convert dealership reach into EV retail leadership.

What Is the Strategic Rationale Behind the VIDA VX2 Launch?

The Indian EV two-wheeler market is transitioning from early adopters to mass-market affordability. While FY24 saw high double-digit growth, the industry is now consolidating around consumer trust, product reliability, and charging convenience. Against this backdrop, Hero MotoCorp is positioning the VIDA VX2 not just as an entry-level EV, but as a volume driver that can democratize electric mobility.

Hero’s decision to price the VX2 below ₹1 lakh—even after FAME II subsidy cuts—signals a calculated bid to absorb margins in favor of scale. This aligns with its broader strategy of defending mass-market dominance while opening doors to future technology upgrades via a modular platform.

How Does VIDA VX2 Compare with Ola, Ather, and TVS in Pricing?

As of June 2025, the base Ola S1 Air is priced at ₹84,999, making it the most affordable high-volume model among major players. TVS Motor Company’s iQube base variant starts at ₹94,343, while Ather Energy’s 450S—the entry model in its premium portfolio—starts near ₹1.10 lakh and goes up to ₹1.55 lakh for higher-spec 450X variants. In this matrix, the VIDA VX2 slots neatly between S1 Air and iQube, but is expected to offer several segment-leading convenience features.

Hero’s pricing strategy could sway first-time EV buyers who previously found Ather’s premium pricing out of reach or perceived Ola as less reliable on service support. Moreover, Hero’s ability to push these vehicles through its extensive dealership network could allow it to offer physical test rides, EMI schemes, and service commitments—elements that online-first competitors may struggle to match at scale.

What Battery and Charging Features Set VIDA VX2 Apart?

One of Hero MotoCorp’s most consumer-centric innovations is the removable battery architecture, retained in the upcoming VX2. This enables users to charge their batteries at home using any standard 5-amp socket—a key advantage in urban India where residential charging remains a bottleneck. In contrast, Ola Electric and Ather rely more heavily on fixed battery formats and public charging networks.

Hero’s marketing campaign during IPL 2025, “Charging Simple Hai,” explicitly reinforced this differentiator by highlighting that “every plug point is a VIDA charging point.” While Ather’s new Infineon partnership is focused on upgrading controller chips and OTA intelligence, VIDA is competing on the more immediate promise of convenience, portability, and reliability—an appeal that could resonate better with middle-income urban families.

How Do Shifting FAME Subsidies Affect Hero’s Competitive Position?

The Indian government’s decision to cut FAME-II subsidies from ₹15,000/kWh to ₹10,000/kWh in 2024 significantly altered the EV pricing landscape. The effective subsidy cap dropped from 40% to 15% of the vehicle’s ex-showroom price. These changes forced many manufacturers—including Ather and TVS—to hike prices or adjust configurations.

Hero MotoCorp, however, absorbed part of the impact for its VIDA line and still maintained a sub-₹1 lakh price point for the upcoming VX2. This move, while compressing near-term margins, has helped Hero maintain price competitiveness. Analysts see this as a strategic subsidy-neutral pricing approach aimed at long-term dominance, rather than short-term profitability.

With the new PM E-Drive Scheme announced in mid-2025 offering a ₹1,000 crore allocation for EV infrastructure, Hero also stands to benefit from the parallel growth of public charging infrastructure, even as its own models reduce dependency on it.

How Does Hero’s Distribution Network Give It a Structural Edge?

Unlike Ola Electric, which still relies on its direct-to-consumer model, and Ather, which operates via premium experience centers in metro cities, Hero MotoCorp has an unparalleled dealer network spanning over 6,000 locations across India. More than 1,000 of these outlets are already being reconfigured to support VIDA EV sales, including charging bays, EV-certified technicians, and demo zones.

This omnichannel strength offers Hero a unique edge in Tier 2 and Tier 3 markets, where physical assurance, service access, and easy financing drive buying decisions. In contrast, TVS is also leveraging its dealership muscle, but Hero’s existing ICE sales volume gives it more leverage with financiers and vendors for EV penetration.

What Is the Early Investor and Analyst Sentiment Around VIDA VX2?

Initial institutional sentiment is cautiously optimistic. While analysts acknowledge that Hero MotoCorp’s EV business is not yet margin accretive, they credit the company for taking a methodical, learning-driven approach rather than chasing volume at the cost of product maturity.

Buy-side desks see potential for Hero to double its EV contribution to 5–7% of total volumes by end-FY26, up from approximately 1.8% in FY25. However, brokerages remain watchful for post-launch consumer traction, software stability, and after-sales satisfaction in new urban markets.

In June’s early trading sessions, Hero MotoCorp stock has faced mild selling pressure, falling about 2.5% despite upbeat dispatch figures. Analysts attribute this to valuation concerns rather than business weakness. With a forward P/E of around 19x and robust ICE margins, any meaningful EV scaling could act as a rerating trigger—especially if VIDA VX2 volumes exceed 10,000 units per month by Q3 FY26.

How Is the Competitive Landscape Evolving in Urban EVs?

Hero MotoCorp faces fierce competition from three major players: Ather Energy, Ola Electric, and TVS Motor Company. Ather continues to dominate premium urban segments, especially in tech-savvy metro pockets. Its build quality, connected features, and ride dynamics are widely praised but come at a cost premium. Ola offers price-led disruption with aggressive marketing but faces concerns around reliability, service coverage, and software bugs. Its recent IPO buzz has drawn investor attention, though operational consistency remains a question. TVS, meanwhile, has steadily grown its iQube volumes and is enhancing range and battery efficiency. Its deep integration with Bajaj Auto’s Chetak platform and smart mobility tie-ins strengthens its EV value proposition.

In this context, VIDA VX2’s success will depend on whether Hero can deliver the right blend of price, reliability, and access—without overpromising on cutting-edge tech.

What Should Investors Expect from Hero MotoCorp’s EV Strategy in FY26?

Analysts tracking Hero MotoCorp expect the company to scale VIDA VX2 deliveries progressively from Q2 FY26. Key metrics to watch include monthly VAHAN registrations, dealership-level offtake, and battery replacement or service feedback. The July 1 launch will also be the first test of Hero’s post-FAME branding agility.

On the financial side, the company’s capital allocation towards EV capex—estimated at ₹750–800 crore annually—suggests it remains serious about transitioning its long-term revenue mix. While ICE vehicles will remain its profit engine for now, a successful VIDA line could eventually contribute 10–12% of Hero’s top-line by FY28.

As broader EV infrastructure evolves under the new central scheme and urban adoption normalizes, Hero’s omnichannel service model and commuter-first focus could turn into compounding advantages. Market participants will be watching closely whether this strategy converts into a sustained EV portfolio rather than a product-led spike.