How IPO-bound Ather Energy intends to take on the competition

Ather Energy IPO: More than a decade ago, it took two IIT graduates to see the potential of electric mobility to revolutionise the two-wheeler space. The idea, according to co-founder and CEO Tarun Mehta, was to create a product as disruptive and revolutionary as the Honda Activa was back in 2001. Today, Ather Energy is the fourth-largest e2w manufacturer in the country by market share, although, despite its first-mover advantage, it continues to trail behind the likes of Ola Electric and newly-crowned market leaders like Bajaj Chetak and TVS Motors.

Founded in 2013, Ather is the second electric two-wheeler manufacturer in India to go public after Ola Electric floated its IPO in August last year. However, the IPO comes in at a time when there’s market volatility, although Ather Energy has assured people that its supply chain remains unaffected by the ongoing tariff wars. Much like before, Ather’s objective remains the same: to highlight the difference in total cost of ownership and ease-of-use that comes with electric two-wheelers. Having started off by catering to a more niche performance end of the e2w market, Ather’s more recent launch of its family scooter, the Rizta, opened up a new consumer base for the brand while utilising the same chassis and platform on which its 450 series of scooters are built.

USP and Challenges

Unlike Ola Electric, which launched its S1 and S1 Pro models in the market after a very brief testing period, Ather Energy made a name for itself through an extensive 7-year testing period where it subjected its maiden e-scooter to a battery of stress tests, ensuring that the product fared well in India’s extreme weather and topographic conditions. As a result, Ather’s products, which are on average more expensive than those of Ola or Bajaj, continue to exceed expectations in terms of performance, durability and dependability. Today, Ather is considered to be a benchmark of sorts when it comes to dependability, range and comfort. Over the years, Ather has secured multiple patents, having introduced its “magic-twist” function, which allows you to slow down the scooter by twisting the throttle in a clockwise direction.

However, despite being one of the top four e2w manufacturers in the country, Ather remains the only one out of the four to not avail of any production-linked incentive or PLI schemes offered by the government. As of last year, Ola Electric bagged approvals for 4 out of 5 applications, TVS Motor, which received 2 out of 5 and Bajaj Auto, which received approval for a record 13 applications for its electric scooter Chetak and its electric three-wheelers.

Manufacturing Facilities/Capacity Expansion

Ather, currently operating two manufacturing facilities in Hosur, is set to establish its third plant at Aurangabad Industrial City (AURIC) in two phases. Construction of the new ‘Factory 3.0’ will begin in May 2025, with the first phase of construction to see completion by March 2027.

Ather’s primary objective behind the IPO is to raise capital for its upcoming e2W factory in Chhatrapati Sambhaji Nagar, Maharashtra (formerly known as Aurangabad). According to a report in the Business Standard, the company intends to use the proceeds for repayment/pre-payment of borrowings and investment in R&D among other things. More importantly, Ather intends to shift most of its production to the upcoming Maharashtra factory, with a proposed annual capacity of 1 million units once both phases of construction are complete.

What the future holds

Today, Ather is facing off against more home-grown players in the performance e2W space than ever before. Two months ago, Bengaluru-based Ultraviolette Automotive unveiled its first performance e-scooter – the Tesseract – along with what is India’s first electric enduro bike called the Shockwave. For its part, Ather announced in September that it is working on two new platforms – the Zenith platform for a slew of e-motorcycles tackling the 150-300cc segment and the EL platform, which will serve as a more cost-effective alternative to the premium line-up, which includes the 450 variants and the Rizta family scooter.

Although Ather hasn’t provided a clear timeline for the deployment of its upcoming e-motorcycle and e-scooter platforms, the EL platform is reportedly in a more advanced stage of development and aims to bring Ather’s scooters into a more affordable realm.

Despite what appeared to be a comparatively slower growth rate, Ather has proven repeatedly that slow and steady wins the race. Given Ola’s litany of issues from reliability to depreciating stock value and finally of dwindling sales figures, Ather has come out as the more stable option. One which is making sound investments in new technologies. Still, challenges abound for Ather Energy with the need to further secure its supply chain, localise battery cell supply, rare earth magnets, among other things. The fact that it has raised ₹1,340 from anchor investors before its IPO bodes well for the e-scooter manufacturer.

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