Whalesbook
### The Growth Discrepancy
Euler Motors' fiscal year-to-date sales of approximately 3,538 units, representing a modest 9.7% growth, fall significantly short of the explosive expansion seen by its larger rivals. Bajaj Auto has reported an impressive 40% surge in electric three-wheeler sales, surpassing 70,000 units, while TVS Motor Company has achieved a remarkable near twelve-fold increase, reaching around 23,000 units. This disparity highlights Euler's struggle to capture market share in a sector that is rapidly electrifying. The broader market sentiment towards Hero MotoCorp, Euler's primary backer, remains positive with analysts maintaining a "Strong Buy" consensus and an average 12-month price target of ₹6,677.33, reflecting confidence in the parent company's overall strategic direction and market position. However, this confidence does not directly translate to Euler's individual performance.
### Strategic Drift and Network Deficit
Industry experts point to a fundamental strategic misstep by Euler Motors: a pivot towards four-wheeler cargo trucks at the expense of the lucrative passenger carrier segment within the electric three-wheeler (e3W) market. This shift, coupled with a conspicuous lack of strong brand recognition and breakthrough technology, has constrained Euler's growth trajectory. The company's distribution network further exacerbates these challenges, with fewer than 100 showrooms across 64 cities, a fraction of Bajaj Auto's nationwide network of over 850 dealerships [cite: Provided News]. Such a limited physical presence restricts customer accessibility and brand visibility, a critical factor in a mass-market segment.
### Hero's Cautious Investment
Hero MotoCorp has continued to back Euler Motors, approving an additional ₹275 crore investment, raising its stake to approximately 36%. This follows an initial investment of ₹510 crore in FY25 [cite: Provided News]. However, this escalating investment is widely interpreted as an experimental approach rather than a commitment to rapid scaling of Euler's e3W operations. Hero's history with Ather Energy, where it initially invested and later launched its own competing brand, Vida, suggests a pattern of calculated risk-taking and brand diversification, prioritizing strategic learning and capability building over immediate market dominance for its investee companies. Hero MotoCorp's own financial health appears robust, with a market capitalization around ₹1.09 trillion and a P/E ratio hovering around 20-22, suggesting a stable, well-valued entity. Its stock has seen a significant +40.98% increase in the last 52 weeks.
### The e3W Market Potential
The Indian electric three-wheeler market presents a substantial opportunity, valued at an estimated ₹17,000 crore with Ebitda margins potentially exceeding 20% [cite: Provided News]. Projections indicate continued robust growth, with the market size expected to reach USD 3.78 billion by 2033, growing at a compound annual growth rate of 13.19%. In 2025, e3Ws accounted for 35% of all EVs sold in India, reaching nearly 700,000 units. This significant market potential makes Euler's current performance all the more concerning, as it fails to capitalize on a burgeoning sector with strong government support and increasing consumer acceptance.
### The Bear Case: Internal Headwinds and Brand Void
Euler Motors' primary obstacles are internal, stemming from its own strategic choices and market positioning. The focus on four-wheeler cargo vehicles, while diversified, detracts from establishing dominance in the core passenger e3W segment where rivals like Bajaj and TVS are aggressively expanding. A weak brand identity and limited technological differentiation make it difficult to attract customers away from established players who benefit from widespread dealer networks and proven reliability. Unlike TVS Motor (P/E ~64-84) and Bajaj Auto (P/E ~30-31), which command higher valuations reflecting strong market confidence and growth prospects, Euler's lack of scale and brand equity presents a significant hurdle. Hero MotoCorp's investment, while financially supportive, does not address Euler's fundamental challenge: creating a compelling, scalable e3W offering that can compete effectively against entrenched, rapidly growing competitors.