 Core–shell-structured nano-capsules consisting of Mo–Ni nano-particle as core and onion-like carbon shell are synthesized using arc-discharge method followed by an air-annealing process. The XRD patterns have ascertained the formation of nickel metal with different planes in fcc and hcp form with the formation of MoO2, MoNi4, and NiMoO4 phases. The BET surface area values gradually decreased with greater encapsulation of nickel whereas the electrochemically active surface area (ECSA) values have been calculated as quite higher. Electrocatalytic activity has been evaluated in HER and OER during water electrolysis for PEM water electrolyzer. These materials have been proved as far better candidate in cyclic voltammograms than those of pure carbon hollow spheres.