E-scooter maker Ather Energy sets $1 bn revenue target for this year | Mint

E-scooter maker Ather Energy sets $1 bn revenue target for this year

CEO Tarun Mehta says Ather had 3,000 customers before the pandemic but now it has 90,000.
CEO Tarun Mehta says Ather had 3,000 customers before the pandemic but now it has 90,000.

Summary

We will need to add a third manufacturing facility by 2024 since we’ll max our current capacity by this year: CEO Tarun Mehta

NEW DELHI : Electric scooter maker Ather Energy expects to achieve $1 billion in revenue in 2023 and turn profitable in the next few years, helped by a growing retail presence.

In an interview, Tarun Mehta, co-founder and chief executive, spoke about how the company, backed by Hero MotoCorp and the National Infrastructure Investment Fund, is using technology to drive user experience with enhanced touchscreens and features such as hill assist and cruise control, on its scooters. Edited excerpts:

How much have you raised to date, and by when do you expect to turn a unicorn?

We’ve raised a total of $170-180 million in the recently-concluded funding round and raised $50 million last October. With this, our valuation is $800 million. I am not concerned much about the unicorn part. Rather, we are already at over 2,000 crore or $300 million in revenue this month. We have decent visibility of hitting the $1 billion revenue figure by the end of this calendar year.

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But your FY22 loss widened to 344 crore. So, when do you hope to turn profitable?

Absolute losses will take a while to come down. In percentage points, Ebitda (earnings before interest, taxes, depreciation, and amortization) would have improved by three to four times this year. In FY22, we hit revenue of 420 crore, and we are on track to beat that revenue in FY23, while we don’t expect absolute losses to grow dramatically. Making a profit will depend on the exact volume build-up. So, I would say (we’d turn profitable) within the next couple of years—not within the next few quarters, for sure. We already have positive gross margins. So, unit economics is good, and with increasing sales at these price points, I’m bullish about where we are headed. The principle is simple—to build a well-integrated product with hardware and software design coming together and a good overall ecosystem experience with a large number of fast chargers and service stations located everywhere. This is why, instead of reducing prices, we’ve focused on building that experience.

What’s your roadmap for this year?

Before the pandemic, we had about 3,000 customers overall. Now, we have around 90,000. Back then, we were only in one or two cities. Now, we’re present in 50-odd cities. So, we’re expanding; (we) have introduced a common charger for apartment complexes. We introduced new accessories, an extended warranty programme, and a massive overhaul of our software, which is four years old. We call this the Ather Stack internally. With Ather Stack 5.0, it gets the biggest revision to date—a new user interface and navigation powered by Google Maps. We’re also introducing a couple of new features in the vehicle, which includes hill hold, which we call auto hold (a feature that prevents a scooter from rolling back a steep road). We’ll introduce more features, including cruise control. We will also need to add a third manufacturing facility for added capacity by 2024 since we’ll max our current capacity by this year.

What are the tech challenges you faced?

In 2016, Ather made a big bet of having a touchscreen dashboard on a scooter. Nobody had done this before, and we wanted Google Maps on our scooter dashboard. This was groundbreaking. In 2016, there were a few suppliers from China who were building tablets that you could stick on a production scooter as an aftermarket unit, but they cost $500-600. Besides, they were not waterproof—you would need to put a polythene sheet on the tablet and, hence, you could not touch them (for navigation). Overcoming these challenges was a big engineering feat. We did a demonstration of it in 2016, where we only focused on showing that you can get Google Maps on a scooter display. We moved this to production in 2018, where the focus remained on navigation. It turned out to be a big thing for us. Our scooters got noted not only for performance but also for the technology element, led by the ‘fancy’ 7-inch touchscreen.

But won’t these dashboards be a distraction?

To handle this, a big part of Ather Stack 5.0 has been the ability to glance and ride distraction-free. To build this, we used eye-tracking and motion tracking on a number of demo scooter units to understand what users stare at and access while riding. We wanted to not make our user experiences just about the touchscreen—using buttons on the handlebar had to be intuitive, too. So, the moment a user crosses 2kmph, touch inputs get disabled—all swipe gestures, etc., are only for when a user is standing steady.

What’s next in line?

Back when we introduced this, everyone thought this would remain a niche startup product. But, by 2020, we could bring the cost of our product down to a reasonable, affordable level. From this point, the industry started copying it. We then decided to look at the bigger picture and not restrict ourselves to just navigation. This led us to a hardware overhaul; we created the new hardware in July 2022, upgraded internals, and Ather Stack 5.0 brought the experience closer to where consumer tablets are today. The current UI (user interface) is specifically automotive — users want to leverage connectivity, use swipe gestures, pinch and zoom, and toggle options and settings, and not just click on buttons. All of this comes from the mainstream use of mobile phones.

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