New Delhi, July 3 -- Hero MotoCorp Ltd's launch of its first electric two-wheeler (E2W) under the battery-as-a-service (BaaS) model will significantly reduce the entry barrier for the segment and perhaps help expand the market. The BaaS model offers a substantial drop in the purchase cost and variable charges based on the customer's actual usage. Yet, with the intense competition and persistent losses in the E2W segment, it could take the company a few years just to break even.

At Rs.59,490 (ex-showroom), the base model Vida VX2 Go is 40% cheaper than the same model without BaaS, along with running charges of Rs.0.96 per km. The strategy has greater significance for Hero because of its higher share in the entry-level market.

"We see the...