Shares of Hero MotoCorp rose nearly 1% on Monday after the homegrown two-wheeler specialist said it had signed a deal with US-based Zero Motorcycles to develop premium electric motorcycles.

Hero MotoCorp approved an equity investment of up to $60 million in Zero Motorcycles, a California-based manufacturer of premium electric motorcycles and powertrains, in September 2022.

The partnership combines Zero’s expertise in developing drivetrains and electric motorcycles with Hero MotoCorp’s manufacturing, procurement and marketing scale, the Pawan Munjal-led company said in a March 6 regulatory filing.

Hero MotoCorp was up 0.98% at Rs 2,484.90 in afternoon trade on the BSE.

“With Zero as our partner, we look forward to accelerating the transformation of electric vehicles in India and the global market,” said Pawan Munjal, Chairman and CEO of Hero MotoCorp.

Hero MotoCorp launched its first electric vehicle, the VIDA V1 scooter, in October last year and has launched its public charging infrastructure in Bengaluru, Delhi and Jaipur.

The company said it has set up nearly 300 charging points in the three cities for public use.

Other brands in India’s booming electric two-wheeler market include Ather, Ola, Hero Electric, Bajaj, TVS, Okinawa, PURE EV and Revolt.

Sales of electric two-wheelers in India are expected to reach 22 million units by 2030, according to a report by global consultancy Redseer Strategy Consultants. According to data from the Vahan dashboard, sales will exceed 600,000 by 2022, accounting for more than 4% of the total two-wheeler market.

Ola Electric topped the electric two-wheeler sales list with a 17% market share, followed by Okinawa Autotech, Hero Electric (led by Naveen Munjal), Ampere Vehicles and Ather Energy.

Hero MotoCorp did not appear in the top 10. The company February 7 posted a stand-alone net profit of Rs 711 crore for the quarter that ended December 2022, up 3.6% from Rs 686 crore a year earlier.

The country’s largest two-wheeler maker posted an operating income of Rs 8,031 crore in the quarter against Rs 7,883 crore in the third quarter of fiscal 2022, up 1.8 per cent.

However, its sales fell 4% year-on-year and 13% month-on-month to 12.4 lakh vehicles in the three months to December as rural demand remained subdued.

Shares of Hero MotoCorp have underperformed peers such as TVS and Bajaj Auto recently due to declining market share in the traditional two-wheelers on which it depends and fierce competition in the electric vehicle space.