IPO-bound electric vehicle manufacturer Ather Energy put on hold its plan to increase capacity in 2023 due to a slowdown coupled with subsidy reduction that hit the EV industry, CEO and cofounder Tarun Mehta has told Moneycontrol.
“We were looking to increase our capacity, we were in the planning stage, however, the industry encountered a slowdown with subsidy being reduced… So we delayed signing up new capacity creation. The current capacity is sufficient for this year and probably early next year as well,” Mehta said.
The plan was to take the production from 4.5 lakh vehicles to around 15 lakh units.
Ather is operating at around 1.5 lakh units of utilised capacity, however, the market has been looking good since the previous quarter and the firm will this year re-evaluate plans for capacity creation, Mehta said.
“We are seeing growth restart from the last scooter and now that we have launched a new model, we will see how the response is in the market and re-evaluate our new capacity creation plans,” Mehta told Moneycontrol on April 6.
Ather has facilities in Hosur in Tamil Nadu. The firm was also looking to finalise setting up a new facility over the next few months, Mehta had told Moneycontrol last year.
His remarks, however, coincided with the electric two-wheeler industry taking a hit after subsidy changes, which led to sales crashing to 46,000 units in June from 1.04 lakh in the previous month, data available with the government’s VAHAN website show.
Registrations have picked up since the previous quarter.
E2W registrations went up by 26 percent year-on-year (YOY) at 81,344 units in January against 64,696 vehicles in January 2023.
As the industry awaits details of the Faster Adoption and Manufacturing of Electric Vehicles (FAME), Mehta said the industry must have subsidies for a few more years.
Ather Energy holds around 13 percent market share, with rivals Ola Electric accounting for around 32 percent and TVS Motors 22 percent.
“We had a reasonably good market share, we are launching a new scooter model now which is in a bigger market and will probably help us capture more of the addressable market. This family scooter category is almost 4X the market that we were operating in,” Mehta added.
New launch
On April 6, Ather launched its first family scooter, “Rizta”, to expand offerings and scoop up a bigger market share. The scooter’s pre-order price is Rs 1,09,999.
Also Read: IPO-bound Ather Energy launches its first family scooter 'Rizta,' priced Rs 1,09,999 onwards
To diversify its revenue, the firm has also launched add-on products like smart helmets under the brand Halo and a lightweight helmet called Halo Bit. Halo is priced at Rs 12,999, and HaloBit at Rs 4,999.
Ather reported a consolidated operating revenue of Rs 1,784 crore in FY23, up nearly 337 percent from the previous financial year. However, Ather’s losses rose nearly 150 percent to Rs 864 crore in FY23.
Also Read: IPO-bound Ather Energy expects growth to return in FY25, following subsidy shock in FY24
The company raised about $128 million in a series E round in 2022, from the National Investment and Infrastructure Fund Ltd, and existing shareholders such as two-wheeler major Hero MotoCorp Ltd.
“The business needs investment for more time and it will be spent on capex, new products and less to spend on cash losses of the business,” Mehta said.
In 2023, Ather raised Rs 900 crore in funding from two-wheeler major Hero MotoCorp and Singaporean sovereign wealth fund GIC in September last year.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
