In this instance, it will certainly be the more cost-effective manufacturing route for that low production volume. Generally, injection molding is only used for volumes of 10,000 or more, because the cost of producing the steel molds is so high, so injection molding is off the table for you here.

However, there are some limitations with urethane molding. For one, you’re limited to using a polyurethane (I am assuming that’s the material you’re already planning to use). Is it the right elastomer for your grip? A second limitation is that only smaller sizes are possible to manufacture, but I think a grip for a handheld power tool will be small enough to be managed. Also, you’ll need to make a few copies of your silicon molds; they’re generally only good for about 30 units or so, so you’ll never do your annual production from a single mold.