In a candid conversation with Reuters, the CEO of Ather Energy, the renowned Indian electric scooter manufacturer, shared plans to accelerate new model launches within India while exploring export opportunities. This strategic shift comes in response to the reduction of government subsidies for electric vehicles, prompting the company to secure additional funding to bolster its growth.
India’s electric scooter market, though modest in size, is steadily expanding. Electric models accounted for just 5 percent of total scooter and motorcycle sales in the previous fiscal year, a far cry from the government’s ambitious target of reaching 70 percent by 2030.
However, the landscape took an unexpected turn in May when the government, without detailed explanation, drastically reduced cash incentives for electric vehicles, limiting them to a maximum of 15 percent of the pre-tax price, down from the earlier 40 percent. Consequently, total e-scooter sales saw a sharp decline the following month.
Ather Energy, too, experienced a dip in sales initially but is now swiftly rebounding. CEO Tarun Mehta disclosed that the company is actively developing two new models, with one slated for launch six months ahead of the original schedule.
Mr. Mehta remarked, “While the shift to electric vehicles could have been swifter without the subsidy change, we anticipate no significant long-term impact. Nevertheless, this transition necessitates us to expedite product launches and intensify our investment in product development.”
Looking forward, Ather Energy is pursuing an ambitious long-term strategy, aiming to derive over 50 percent of its sales from global markets by the turn of the century, as articulated by Mr. Mehta.
Positioned as India’s third-largest e-scooter manufacturer, trailing behind Ola Electric, backed by Softbank Group, and local giant TVS Motor, Ather intends to diversify its product lineup. They plan to introduce a family-oriented scooter alongside their current two-model range designed for individual riders.
Valued at approximately $750 million (roughly Rs. 6,250 crore), Ather will seek additional funding before the close of 2023 to fuel its growth aspirations, though precise details remain undisclosed. A reliable source privy to Ather’s plans indicated their intent to secure funding on a scale akin to the recent $108 million (about Rs. 900 crore) obtained from existing stakeholders, Hero MotoCorp and Singapore’s sovereign wealth fund, GIC, through a rights issue.
Furthermore, Ather is gearing up to commence sales in an Asian export market within a couple of months, signaling the company’s commitment to tapping into global opportunities. In the words of Mr. Mehta, “India is poised to become not only the world’s largest market for electric two-wheelers but also a significant exporter on the global stage.”