Hero MotoCorp Lines Up ₹1,500 cr Capex for FY27, to Double EV Capacity

Hero MotoCorp is stepping up its investments with a planned capital expenditure of over ₹1,500 crore during financial year 2027, as India’s largest two-wheeler maker expands its manufacturing capacity in electric vehicles and high-growth scooter segments, as well as prepares for new product launches.

“This capital expenditure is going to expand our capacity in scooters, where some of our models are doing very well. We are doubling our capacity,” the automaker’s management said in a post-earnings call on Wednesday.

Autocar Professional had exclusively reported that Hero MotoCorp is planning to double its manufacturing capacity of electric two-wheelers at its Sri City (Chittoor, Andhra Pradesh) plant, with plans for multiple new electric two-wheeler models under the Vida brand.

“We are investing in capacity expansion. In EVs, in fact, in a matter of a month, we will double our capacity from where we started last year, and then further down the road, there will be further doubling of capacity as we are seeing great momentum for our Vida brand,” the management said.

The investment follows strong earnings in financial year 2026, during which the company reported record revenue and profit. The focus now is shifting towards segments where growth is accelerating, particularly electric and ICE scooters.

Hero MotoCorp has already increased the capacity of its Destiny scooter by 50%, while it will be doubling the capacity of its ICE scooter model – Zoom. “For EVs, we are close to completing the expansion and will reach 50% more capacity than last quarter within a month. Capacity will increase further in the following months,” the management noted.

At the centre of Hero’s FY27 capex plan is a rapid scale-up of its EV business under the Vida brand. Hero’s EV scooter volumes grew 2.5x in FY26, albeit on a lower base, indicating early traction in the segment. The company has recently ramped up its EV manufacturing capacity to 25,000 units per month from 15,000 units, and is now preparing for further expansion as demand builds.

This higher focus reflects broader industry trends. While the two-wheeler market grew around 10% in FY26 to cross 21 million units, electric two-wheelers expanded at over 20% from a low base, taking penetration to roughly 6–7%. Penetration is expected to rise further to 8–10% in FY27, supported by improving cost economics, fleet demand, and wider participation from established OEMs.

Alongside EVs, Hero is also expanding capacity in its ICE scooter portfolio, particularly for models seeing strong demand. This aligns with FY26 performance, where scooter volumes grew 48% year-on-year.

The ₹1,500 crore outlay spans multiple areas beyond capacity expansion. The company is preparing a pipeline of new launches across EVs, premium motorcycles, and scooters, while continuing to invest in brand building and digital technologies.

Hero is also investing in connected vehicle platforms, GenAI-led customer interfaces, and low-emission powertrains, including flex-fuel options. In parallel, it will invest over ₹700 crore to set up a second global PATH (parts, accessories, and merchandising) centre in southern India to strengthen its accessories and aftermarket business.