The electric two-wheeler industry’s third major player, Ather, anticipates scooters dominating the market in the upcoming period. They are gearing up to introduce the first model on their new platform in less than a year, with plans potentially extending to unveiling their premier motorcycle around 2027.
Electric motorcycles are slowly becoming a part of the electric vehicle landscape, with Ola Electric gearing up to launch four e-motorcycles in the coming year. Meanwhile, Ather Energy is not yet eager to venture into the motorcycle sector.
Ravneet Singh Phokela, the Chief Business Officer at Ather Energy, feels that scooters present a more lucrative opportunity in the electric vehicle sector in the country. Leveraging their early entry into the market, the company plans to strengthen their position in the e-scooter segment before branching out to motorcycles, a shift expected to occur in about three to three and a half years.
To solidify its standing in the e-scooter industry, Ather Energy is creating a new platform on which several models will be based. The initial model from this platform, described as a significant development, is expected to be unveiled in approximately eight months. Rather than expanding the price spectrum of its portfolio, Ather intends to diversify its offerings in terms of functionalities and applications.
The pricing of Ather Energy’s scooters varies between INR 1.29 lakh and INR 1.60 lakh, depending on the region where they are sold. Approximately 80% of e-scooter sales occur within this price range. The forthcoming models are anticipated to remain within this pricing bracket, focusing on different uses and applications, rather than altering the price point substantially.
FAME subsidy revocation impacts the profitability
The reduction of the FAME subsidy on June 1st affected the profitability margin for each Ather scooter by about INR 33,000. A portion of this decrease was passed onto the consumers, with the company absorbing the remainder. Phokela predicts a swift recovery to gross margin profitability in the coming months, followed by a positive shift in EBITDA.
Regarding financial aspects, Ather Energy, valued at approximately USD 739 million last year, has recently secured around INR 550 crore in funding from Hero MotoCorp, its primary shareholder holding a 34% stake. The company remains open to further investment opportunities even with this substantial financial backing.
Recently, Ather Energy introduced a new model named Ather 450 S, a more affordable variant of the 450X. This introduction, coupled with the addition of a 2.9 kWh battery pack version of the 450X, is projected to boost Ather Energy’s monthly sales volumes by 30-40%. Despite the recent decrease in market sales owing to the FAME subsidy cut, Phokela anticipates a return to previous sales volumes of 75,000-80,000 units per month within a 3-5 month period.