Indian electric scooter maker Ather Energy will accelerate the launch of new models domestically and test export markets, its CEO told Reuters. He will raise new money to boost growth after the government cut subsidies for the vehicles.
India’s electric scooter market is small but growing: e-models accounted for 5 percent of total scooter and motorcycle sales last fiscal, while the government had set a target of 70 percent by 2030.
But in a surprise move in May, the government, without explanation, reduced financial incentives for the vehicles to a maximum of 15 percent of the pre-tax price, down from 40 percent previously. The following month, overall e-scooter sales more than halved.
Ather’s sales also fell, but are rising rapidly. CEO Tarun Mehta said in an interview that the company is now working on two new models, one of which will be launched six months earlier than originally planned.
“The transition to electric vehicles could have been faster had it not been for the (subsidy) change, but even then there will not be a major impact in the medium to long term,” he said.
“This shift means we need to accelerate product launches and invest more in product development,” he added.
As part of a long-term growth strategy, Ather aims to have more than 50 percent of its revenue come from global markets by the end of the century, Mehta said.
Ather, India’s third largest e-scooter maker after Softbank Group-backed Ola Electric and local TVS Motor, plans to add a scooter designed for use by different members of a family to its current range of two models, aimed at individual riders, Mehta said. .
Valued at about $750 million (nearly Rs. 6,250 crore), Ather will raise more money before the end of 2023 to support its growth plans, he said, without giving more details.
A source with direct knowledge of Ather’s plans said the company is looking to raise an amount similar to the $108 million (nearly Rs. 900 crore) raised from existing shareholders Hero MotoCorp and Singaporean sovereign wealth fund GIC in a recent rights issue .
Ather will also pilot sales to an Asian export market in a few months.
“India will not only be the world’s largest market for electric two-wheelers but also the largest exporter,” he said.
© Thomson Reuters 2023