Hero MotoCorp doubles down on Ather with ₹1,000 crore bet as EV strategy enters next phase

Hero MotoCorp on Tuesday approved an investment of up to ₹1,000 crore in Ather Energy through a preferential issue of equity shares or other eligible securities, subject to approvals from Ather’s board and shareholders.

“The Committee has approved an investment of up to ₹1,000 crore in Ather Energy Limited... through a preferential issue of equity shares or any other securities including compulsorily convertible preference shares, warrants, or any other securities convertible into equity shares,” the company said in a regulatory filing with the stock exchanges.

The investment comes as Hero MotoCorp expands its electric vehicle business through its own VIDA brand while continuing to retain Ather as a key strategic investment.

In his message to shareholders in the FY2025-26 annual report, Chief Executive Officer Harshavardhan Chitale said Hero’s “continued partnership with Ather Energy” formed part of the company’s broader electric mobility ambitions as it invested in connected technologies, low-emission powertrains and digital capabilities.

The annual report also says Hero’s investment in Ather is intended to help build “a leading, comprehensive EV portfolio across multiple categories”, alongside its own VIDA electric scooter business and investments in charging infrastructure and Battery-as-a-Service.

A strategic investment beyond equity ownership

For Hero, Ather represents more than an equity investment.

The Bengaluru-based company has built a premium electric scooter franchise while expanding into charging infrastructure, battery management and energy services. According to Hero’s regulatory filing, Ather’s revenue increased to ₹3,671.76 crore in FY2025-26 from ₹2,255 crore in FY2024-25, and from ₹1,753.8 crore in FY2023-24, reflecting rapid scale-up even as the company remains in an investment phase.

Hero currently holds 29.48 per cent of Ather on a fully diluted basis. The eventual shareholding following the proposed investment will depend on the size and pricing of the preferential allotment and any subsequent issuance of securities.

The latest investment reflects Hero’s twin-track approach to electric mobility .Alongside expanding its wholly owned VIDA electric scooter business, the company is also building a broader EV ecosystem through investments in technology, charging infrastructure and strategic partnerships.

VIDA ended FY2025-26 with a 10.2 per cent market share after gaining six percentage points during the year. Hero said its product expansion plans, together with strategic investments in Ather, position it to build market share across India’s electric two-wheeler industry.

Rather than viewing VIDA and Ather as competing businesses, Hero’s strategy suggests the two are expected to address different opportunities within the country’s fast-growing electric mobility market.

Hero is making the investment from a position of financial strength .The company ended FY2025-26 with cash reserves exceeding ₹14,000 crore, remained debt-free and reported a return on capital of more than 30 per cent, giving it the flexibility to continue investing in new technologies while supporting its core motorcycle and scooter business.

Even so, the investment remains a long-term strategic bet. Hero’s consolidated financial statements show the company has recognised its share of Ather’s losses under the equity method of accounting while continuing to increase its commitment to the business, reflecting management’s confidence in the long-term growth potential of India’s electric two-wheeler market.

The proposed investment signals that Hero MotoCorp intends to strengthen its presence across multiple parts of the electric mobility value chain rather than rely on a single brand or platform. By expanding VIDA while increasing its investment in Ather, the company is seeking exposure to electric scooters, charging infrastructure, battery services and related technologies as the market moves into its next phase of growth.