Hero MotoCorp has reduced the carrying value of its investment in US-based Zero Motorcycles to ₹19 crore in FY26. This 92% markdown follows a dilution in stake to 0.8% after the company opted not to join a recent funding round. Despite the financial hit, Hero plans to continue its technology partnership with the firm to develop premium electric motorcycles under the VIDA brand.
Hero MotoCorp has reported a sharp reduction in the value of its investment in the California-based electric motorcycle maker, Zero Motorcycles. In the fiscal year 2026, the company slashed the carrying value of this holding to ₹19 crore, a 92% decline from the ₹241 crore reported in FY25. This downward revision represents a significant financial adjustment following an earlier valuation drop from ₹438 crore in FY24.
Impact of Stake Dilution
The devaluation is primarily linked to a recent funding round at Zero Motorcycles in which Hero MotoCorp did not participate. This decision led to the dilution of Hero’s stake from 6.9% to 0.8%. Consequently, the company recorded a fair value loss of ₹222 crore for the fiscal year. While the investment has faced challenges, the company’s broader electric vehicle strategy remains active, including its partnership with Taiwan-based Gogoro for battery swapping and a ₹525 crore investment in the electric commercial vehicle startup Euler Motors.
Contrasting Performance of Ather Energy
While the Zero Motorcycles investment has faced pressure, Hero MotoCorp’s bet on the domestic electric scooter manufacturer Ather Energy has yielded significant returns. Since its initial investment in 2016, Hero has invested approximately ₹1,700 crore into the company. Currently holding a 30% stake, Hero MotoCorp is now a promoter in Ather Energy, with its shareholding value estimated to be over ₹13,000 crore. This contrast highlights the differing outcomes of Hero's various minority stake acquisitions within the evolving electric mobility sector.
Future Product Strategy
Despite the reduction in investment value, Hero MotoCorp maintains that its technology collaboration with Zero Motorcycles remains operational. The two companies, which entered a formal partnership in March 2023, are focused on the development of premium electric motorcycles. Hero has already showcased concept models, such as Project VxZ, at the EICMA motor show under its VIDA brand. The ultimate success of this collaboration for shareholders will depend on the successful commercial launch and market reception of these high-performance electric bikes. Investors will likely monitor future updates regarding the product launch timeline and the extent to which these premium offerings can contribute to the company's electric vehicle portfolio amid rising competition in the domestic electric two-wheeler market.