Home / Auto News / Ather plans to boost production tenfold

NEW DELHI : Electric two-wheeler maker Ather Energy is gearing up for a steady ramp-up of production of its scooters to attract a large number of first time electric vehicle (EV) buyers, even as it bets on a high-range flagship to participate more competitively in an increasingly crowded electric two-wheeler market.

The company, which is backed by Hero MotoCorp, on Tuesday launched the third generation of its flagship scooter 450X with a “true range" that crosses the psychological 100 km-range barrier and is closer to the specifications brands such as Ola Electric offer on the market. Equipped with a larger battery pack, the product also comes with various technological and hardware upgrades, such as a much larger RAM, which is geared to improve user experience and lend more consistency to the product’s performance. Ather Energy is now working towards steadily expanding its production capability to more than 10 times its current levels by next year.

The two-wheeler maker is targeting a production rate of 30,000- 40,000 units a month next year, up from the current production over 3,000 scooters a month, said Tarun Mehta, chief executive officer, Ather Energy.

“We will be making 10,000 vehicles a month in time for the festive season this year. From later this month itself, we will see a significant jump in our volumes. Supply constraints have been our biggest challenge. Our sales for now will only improve by us producing more and not because of more demand. There is a momentum angle to launching this product. We expect that by next year, we’ll be in about 150 to 200 showrooms across 100 plus cities. By then, we should be doing 30,000-40,000 units a month and, at that scale, we’ll attract a lot of first-time EV buyers," Mehta said.

“And for them a longer range smoothens the journey to electric so much more. Here we have 145 kms in certified range, true range of over 100 kms - that could make people stop worrying about what happens when the battery dies and makes their purchase decision a lot simpler. So at that scale, I think this particular launch could hold us in a really good place," he added.

Ather Energy recently raised $128 million in its latest funding round led by sovereign wealth fund National Infrastructure Investment Fund (NIIF) and existing backer Hero MotoCorp, with plans to raise another round in the next couple of years. The company plans to utilise these funds to strengthen its supplier network and invest in capacity creation at its second manufacturing facility, which could give it 400,000 units in annual production capacity, in addition to the 120,000 capacity it already has.

"Our second production facility will go on stream before the festive season", Mehta told Mint. “Our supplier base is catching up really fast and we will see a lot of payoff in the next couple of quarters," Mehta said.

The 3rd Gen Ather 450X is priced at a premium, with a majority of the competition's offerings priced below Ather. However, Ather has not fully passed on the cost of the bigger battery pack in the new pricing which only sees a small 3,000-5,000 delta over the previous pricing. The scooter was launched at a price of 155657 lakhs (ex showroom, Bangalore).

“We have reduced our internal cost structures on the vehicle a lot, we are at half the cost where we used to be in 2020 and we can come down more. We still see a 30%-40% potential for realisation and are optimistic that we can keep absorbing better and better products. We haven't fully passed on the full burden of these battery price increase, or the new bigger battery pack or the new hardware. But frankly, we've also been able to improve on cost structures a lot every single quarter. Despite this we retain positive gross margins and continue to grow quarter on quarter. So we are happy with the pricing benchmark we have set," Mehta said.


Alisha Sachdev

Alisha Sachdev is an assistant editor with Mint based in Delhi. She reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies. She also focusses on developing multimedia properties for Mint and currently hosts the 'In A Minute' series and the Mint Primer podcast. Previously, she has worked with CNBC-TV18 and NDTV.
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