Hero MotoCorp-backed Ather Energy to raise Rs 200 cr for e-scooter plans

Ather plans to launch its 1st e-scooter in 2018, sell 20,000-30,000 units per year

Smart electric scooter start-up Ather Energy, backed by two-wheeler major Hero MotoCorp, is looking at differentiating itself in the segment with digital support through doorstep delivery of scooters and personalised support with customers mapped to dedicated support personnel.

The company is planning to raise over Rs 200 crore to support the commercial launch of its first vehicle by next year. The company has also set a target to sell around 20,000-30,000 units in three-four years. 

Ather does not intend to restrict itself to manufacturing automobiles alone in the future, said a senior company official.

Ather Energy CEO and co-founder Tarun Mehta said that the functional test for the company's S340, which will be its first model, is over and it gave good results. By February, the company expects to start trial production and, by the middle of next year, the product will be in the market.

"We will not compete with petrol vehicles. Our target customers are those who understand and appreciate this technology and it will be for city ride," said Mehta.

The company is planning to launch the product first in three cities — its hometown Bengaluru, Chennai, and Pune. Simultaneously, it is also looking at setting up infrastructure to charge the batteries.

Mehta ruled out using Hero MotoCorp's network and sharing of technologies with India's largest two-wheeler maker, which invested over Rs 200 crore in the company last year.

"We don't have any technology sharing, product sharing or IT sharing agreement with Hero," said Mehta, who will be taking on Hero, TVS, and other big brands in the market.

He claims that Ather S340 has a top speed of 72 km/hr, a range of 60 km, and comes equipped with fast charging.

It is designed to be faster and lighter than most conventional scooters.

"We are not just building the best two-wheeler, we are also participating in the growth of a new and nascent industry with completely new technology, new platforms, and with a very different vendor and refuelling infrastructure," said Mehta, whose company is not only working on developing the product but also the entire ecosystem.

Whether it's on the supply chain side or the charging infrastructure, the company is making efforts to address major gaps that exist in the industry today.

The other differentiator in Ather's approach in providing a holistic brand experience to consumers and not just a product. "Ours will be an online-only purchase model with doorstep delivery," said Mehta.

Every S340 rider will be mapped to a dedicated Ather support personnel.

Speaking about cost, which is one of the major bottleneck for the electric vehicles (EVs) industry, he said that the cost of producing an electric scooter is about 80-1.1 lakh based on the model.

But these prices can be brought down with scale. At 100,000 units, the cost would be at par with petrol vehicles. Another factor is the cost of components, especially electronics. However, common costs like Lithium ion batteries are on the downward trend. With prices falling and the energy density of batteries going up, more powerful EVs can be built at a lower cost.

Even at current prices, a consumer can break even on the total cost of ownership for a lower-end EV two-wheeler within two years and within five years for a premium scooter.

Ather is setting up an assembly facility in Bengaluru that will have the capacity to produce 20,000 scooters once completed. In the next three years, the company plans to sell around 20,000-30,000 units.

The company has spent over Rs 100 crore on research and development. Setting up the assembly facility is an equally large spend for Ather.

"Currently, our focus is rolling out the S340 and we are still some time away from working on our next line of products... we do not intend to limit ourselves to automobiles alone. After all, we are Ather Energy and not Ather Auto," said Mehta.