Leading electric vehicle maker Ather Energy has ramped up its production by around four times to 4.20 lakh electric vehicles per annum through its new capacity inaugurated in Hosur in Tamil Nadu, with a total investment of Rs 320 crores.
The ramp-up in production comes as the company plans to expand to other geographies including Southeast Asia and Latin America. Ather Energy is also witnessing an increased adoption of Ather and EV in general.
The firm is also in the final stages of talks with state governments to set up a new plant with a total capacity of around one million electric vehicles per annum by the end of FY23, which will make Ather the biggest two-wheeler (2W) EV manufacturer in India. Its rival firm Ola Electric is said to have a planned capacity of around 20 lakh (two million) electric vehicles. Another rival Okinava Autotech’s new factory will have an annual production capacity of 10 lakh units, which will be fully operational from October 2023.
Along with the EV capacity expansion, Ather is increasing its battery manufacturing capacity to 4.3 lakh units from the present capacity of around 1.2 lakh units per annum. The total investment charted for the next five years is around Rs 650 crore, out of which around Rs 320 crore is spent on the present project.
"We are planning to clock sales of around 26,000 to 30,000 units per month by the end of this financial year," Swapnil Jain, Ather Energy's cofounder and chief technology officer, told Moneycontrol on the sidelines of the inauguration.
While 4.2 lakh units per annum is the total capacity, the company presently has a capacity utilization rate of 50 percent and makes around 550 vehicles a day. Capacity utilisation is the extent to which a manufacturer employs its installed productive capacity presently.
“The firm had a workforce of around 350 and with the new capacity the workforce has gone up to around 1100 employees,” Jain said.
With the expanded capacity, Jain believes the waiting period for end consumers to come down from around 4-6 months to 15 days or same-day deliveries. In fact, the new capacity can produce around 1,200 scooters per day and a vehicle takes 40 seconds to make.
Ather is planning to close the year with an Annual Revenue Run Rate or ARR of Rs 2,400 crore.
Ather is also ramping up its grid or power charging facilities to around 1400 units by end of the present financial year. Presently, the firm has a capacity of the grid of 600 units.
Mulling new EV making plant
Ather is in the final stages of concluding talks with the state governments of either Gujarat, Tamil Nadu, Karnataka or Telangana to set up a new plant with an annual capacity of around 1 million electric vehicles per annum. This will make Ather the biggest manufacturer in the country.
"We are in the final stages of talks with multiple governments, so by the end of this financial year itself we will get an approval and we are thinking of a capacity of around 1 million from the new plant."
In the new plant, the firm is also mulling a vertical expansion of making frames and some other components inhouse.
IPO Plans Postponed
While Ather initially had plans to hit the public markets by 2024, the company has presently postponed the same for now.
"We are not actively chasing IPO, we have also not taken the initial target of 2024 aggressively and we are being a little flexible due to market conditions."
Supply Chain Struggles Have Eased OutThe entire electric two-wheeler industry, including Ather Energy witnessed a sharp pinch in their manufacturing due to shortage of semiconductors.
"On the semiconductor space especially, we have brought in a a lot of second sources. We now have widened our sourcing companies and this gives a lot more risk mitigation."
Focus Areas for FY24
Ather Energy’s main focus for FY24 is ramping up the 2W production and developing battery components in-house and Jain said that are no immediate plans for 4W manufacturing, Jain said.
"We don’t want to put focus on hundred things, we will now only focus on 2W. Only when we achieve a production, market and financial stability in 2W making, we will think about 4W manufacturing, " He said, clarifying that there are no research and development investment also happening for four wheelers presently.
The firm is also looking to convert its manual assembly lines to semi-automated units in India.Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather has so far raised around $320 million, with its latest fundraise led by National Infrastructure and Investment Fund. Its existing investors include Tiger Global, Hero MotoCorp and Caladium Investments. The firm's two products include Ather 450X and 450 Plus.