Hero MotoCorp to invest Rs 525cr in Euler Motors, expands into electric three-wheelers

Hero MotoCorp, the world’s largest two-wheeler manufacturer, is accelerating its transition into the electric vehicle (EV) sector with a substantial ₹525 crore investment in Euler Motors. This strategic move places the company at the forefront of India’s evolving electric three-wheeler market, a segment poised for significant growth in the coming years. By securing a 32.5% stake in Euler Motors, Hero MotoCorp is reinforcing its long-term vision of becoming a leader in next-generation mobility while capitalizing on the rapid electrification of India’s commercial vehicle industry.

Why Is Hero MotoCorp Investing in Euler Motors?

Hero MotoCorp’s decision to invest in Euler Motors aligns with its broader ambition to diversify beyond the two-wheeler market. The company has built its reputation on a legacy of fuel-efficient motorcycles and scooters, but as the industry shifts toward sustainability, it recognizes the urgency of establishing a strong presence in the electric mobility space.

Euler Motors, founded in 2015, specializes in designing, manufacturing, and servicing electric three-wheelers, primarily for last-mile logistics and passenger transport. The company recently expanded into electric four-wheelers, further strengthening its foothold in the commercial EV sector. With a presence in 30 cities across India and a growing market share, Euler Motors presents an attractive opportunity for Hero MotoCorp to tap into an emerging segment with high growth potential.

How Does This Move Position Hero MotoCorp in the EV Landscape?

The Indian EV market has been rapidly expanding, driven by government incentives such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme and state-level subsidies. Electric three-wheelers, in particular, have gained traction due to their lower operating costs, reduced emissions, and increasing demand in urban delivery services. Industry forecasts suggest that electric three-wheelers could account for 35% of total sales in the near future, making this a crucial moment for Hero MotoCorp to enter the sector.

This investment signals a strategic pivot for the company, which has traditionally dominated the internal combustion engine (ICE) two-wheeler segment. By securing a significant stake in Euler Motors, Hero MotoCorp is not only hedging against potential declines in ICE vehicle sales but also positioning itself as a key player in India’s clean energy transition. The move also enables the company to leverage Euler’s existing technological expertise and market reach, accelerating its own entry into the electric commercial vehicle sector.

What Financial and Strategic Impact Will This Investment Have?

Hero MotoCorp’s ₹525 crore investment in Euler Motors will be executed in multiple tranches, with a mix of primary and secondary funding. The capital infusion will allow Euler Motors to scale its production capacity, invest in research and development, and expand its distribution network. In return, Hero MotoCorp will acquire equity shares and Series D Compulsory Convertible Preference Shares, ultimately securing a 32.5% stake in the company.

Euler Motors’ financial performance has demonstrated impressive growth, with revenues rising from ₹25 crore in FY22 to ₹49 crore in FY23, and further surging to ₹172 crore in FY24. This trajectory underscores the strong demand for electric three-wheelers and the potential for exponential expansion in the sector. Hero MotoCorp’s backing is expected to accelerate Euler Motors’ growth, positioning it as a dominant force in the commercial EV market.

What Does This Mean for the Broader EV Industry?

The investment in Euler Motors underscores the increasing confidence in India’s EV sector, particularly in commercial transportation. While personal EV adoption has been slower due to high upfront costs and limited charging infrastructure, the commercial segment has seen rapid growth. Fleet operators and logistics companies are increasingly transitioning to electric three-wheelers, given their cost efficiency and compliance with sustainability mandates.

Competitors like Bajaj Auto and TVS Motor Company have also intensified their focus on electric mobility, making it essential for Hero MotoCorp to expand its EV portfolio. This investment allows Hero MotoCorp to compete more effectively in the evolving landscape, ensuring that it does not fall behind in the electrification race.

How Has Hero MotoCorp’s Stock Responded to This Investment?

Following the announcement of its investment in Euler Motors, Hero MotoCorp’s stock (NSE: HEROMOTOCO) recorded a 1.7% increase, closing at ₹3,596.90 on March 20, 2025. Investor sentiment has been largely positive, with the stock delivering a weekly return of 1.93%, reflecting optimism surrounding the company’s EV strategy.

Trading activity has also surged, with the stock’s daily volume reaching 771,668 shares, surpassing the seven-day average of 560,271 shares. Technical indicators suggest immediate support at ₹3,479.18 and resistance at ₹3,624.28. A breakout above this resistance level could signal further bullish momentum, reinforcing confidence in Hero MotoCorp’s strategic direction.

Market analysts remain cautiously optimistic, acknowledging that while the investment strengthens Hero MotoCorp’s presence in the EV space, its long-term success will depend on execution. Investors are advised to monitor the company’s progress in scaling its EV initiatives before making long-term decisions.

What Are Hero MotoCorp’s Broader Sustainability Initiatives?

In addition to its investment in Euler Motors, Hero MotoCorp’s board has approved the establishment of a Section 8 company dedicated to Corporate Social Responsibility (CSR) initiatives. While details remain undisclosed, this entity will focus on social and environmental programs that align with the company’s commitment to sustainable growth.

This initiative complements Hero MotoCorp’s broader vision of integrating sustainability into its business operations. As global regulatory frameworks tighten around emissions and clean energy adoption, automotive companies are increasingly being evaluated not just on financial performance, but also on their commitment to environmental and social impact.

Where Does This Leave Hero MotoCorp in the Future of Mobility?

Hero MotoCorp’s foray into electric three-wheelers through its investment in Euler Motors is a defining moment for the company. As the automotive industry undergoes a historic transformation, this move ensures that Hero MotoCorp remains at the forefront of innovation while adapting to shifting consumer preferences and regulatory landscapes.

With the electric three-wheeler market poised for significant expansion, this investment not only diversifies Hero MotoCorp’s business but also strengthens its ability to lead in sustainable transportation. By leveraging Euler Motors’ expertise and market presence, Hero MotoCorp is positioning itself as a key driver in India’s transition to clean mobility.

Investors and industry stakeholders will be watching closely as the company executes its EV strategy in the coming months. If successful, this investment could serve as a launchpad for Hero MotoCorp’s broader expansion into the electric vehicle ecosystem, cementing its reputation as a future-ready mobility giant.