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Ather Energy targets 1 million e-scooters a year as demand grows

Ather Energy, India’s top electric scooter maker by revenue, is raising funds to increase annual production to one million scooters over the next three years amid rising demand, told Reuters the co-founder and managing director of the startup. Ather, which counts Tiger Global and Indian bicycle maker Hero MotoCorp among its investors, has raised about 12 billion rupees ($160 million) since its inception in 2013 and is in the process of raising more, said Tarun Mehta. in an interview.

“Our plan was not to raise more capital and focus on growing the brand, but the rate of transition to electric and the pace at which the supply chain and capacity needs to increase is much faster than what we thought a year ago,” Mehta said. .

He declined to comment on how much the company plans to raise. A source with knowledge of the plans said Ather is looking for around $133 million. Of this amount, he has already raised $56 million from Hero.

Sales of electric scooters increased more than fivefold in India last year as high fuel prices pushed buyers to seek alternatives and government subsidies narrowed the price gap between electric and gasoline-powered models.

Ather Energy is currently selling two offerings – 450 Plus and 450X

Even so, electric models accounted for just 1% of India’s total motorcycle and scooter sales of 14.5 million in 2021. The government wants this to reach 40% by 2030 as it seeks to cut its fuel bill. importing oil and reducing pollution.

Ather is also building its war chest against growing competition from startups like Softbank Group-backed Ola Electric, which recently raised $200 million, as well as traditional Indian bike makers like Hero, Bajaj Auto and TVS, which are accelerating their clean mobility plans.

Over the next three years, Ather plans to increase its annual production capacity to one million scooters from 400,000 by the end of 2022, install 5,000 fast chargers across India, develop new products and expand its network to 600 stores, Mehta said.

According to him, the biggest challenge is to develop the supply chain and convince suppliers to invest up front in electronic components such as motors and controllers for India’s nascent electric vehicle market.

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Ather has expanded rapidly over the past year as demand soars

The investment required and the pace of expansion will also set back the profitability of Ather, which Mehta says will be only two years old.

“Demand is massive and the Indian market has been constrained by supply,” he said.

Ather currently manufactures around 5,000 electric scooters per month and builds its own lithium-ion battery. Mehta plans to expand production to 20,000 scooters per month in 2022, helped by an increase in demand from smaller towns.

Its longer-term vision is to invest in companies that help increase the use of clean energy.

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“The next thing that excites me is trucks and buses – it’s low volume but massive power consumption,” he said.

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