Mahindra & Mahindra (M&M) and Hero Electric formed a strategic collaboration in electric mobility to meet India’s growing demand for electric vehicles (EVs).
Mahindra Group will manufacture Hero Electric’s electric bikes, the Optima and NYX, in its Pitampur plant as part of the agreement to address market demand. Ludhiana is home to Hero Electric’s production facility, which sells a variety of electric scooters.
“With this collaboration along with the expansion of their existing Ludhiana facility, Hero will be able to meet its demand of manufacturing over 1 million EVs per year by 2022. This will further enable them to drive adoption of a cleaner mode of transport,” M&M said in an exchange filing today.
The automaker and Hero Electric will sign a five-year deal with the possibility of expanding the collaboration area in the future. The transaction is projected to be worth between ₹140 – ₹150 crores during the contract period. The collaboration would help Hero Electric meet increased demand for electric vehicles by maximizing plant capacity utilization.
“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 added.