Electric 2-wheeler maker Ather to cut aluminium content to ease costs

Ather plans to reduce aluminium content in scooters to cut costs and improve margins, with up to 15 per cent savings expected on its upcoming EL platform

Electric two-wheeler maker Ather Energy is looking to reduce aluminium usage in its scooters as part of a broader engineering-led effort to cut costs and improve margins, even as it navigates volatile global supply chains and commodity cycles.

 

Speaking to Business Standard, Cofounder and CTO, Swapnil Jain said the company’s earlier products, particularly the performance-focused 450 series, were built with relatively high aluminium content to deliver lightweight and high-performance characteristics. That approach is now being recalibrated as Ather pivots towards more practical and family-oriented scooters. “High aluminium was meant for a nimble, high-performance product. A high-performance family vehicle doesn’t necessarily need all of that,” Jain said, adding that newer models such as the Rizta have already reduced aluminium intensity, with further cuts being planned on the upcoming platform.

 

The transition is expected to have a meaningful cost impact. Sources indicated that reducing aluminium content and replacing it with alternatives such as iron and steel could deliver cost savings of up to 15 per cent for every vehicle, directly aiding margins. This aligns with Ather’s new EL platform strategy, which is being designed for scalability and cost efficiency, including changes in materials, electronics integration, and overall architecture.

 

Analysts say such design-led cost optimisation is already visible in the company’s financial trajectory. According to an Equirus Securities report, Ather’s gross margins have expanded sharply —from around 6 per cent in 2021-2022 (FY22) to about 20 per cent in the first nine months of FY26 — driven by bill-of-material (BOM) reductions and engineering efficiencies.

 

The brokerage noted that the upcoming EL platform is expected to “drive the next leg of BOM cost reduction,” supporting a multi-year improvement in unit economics. 

 

Equirus expects margins to continue improving, with a path to Earnings Before Interest, Taxes, Depreciation, and Amortization (Ebitda) breakeven over the medium term as scale and cost efficiencies kick in.

 

A separate report by Emkay Global Financial Services highlighted margin expansion, noting that Ather’s gross margins have risen to around 20 per cent, while Ebitda losses have narrowed sharply to under 10 per cent.

 

Jain said aluminium costs remain highly sensitive to global energy prices, adding to the urgency of reducing dependence. “Aluminium depends heavily on energy, so the cost goes up as energy prices rise,” he said, noting that while India has adequate domestic capacity and supply shortages are unlikely due to the West Asia crisis, pricing volatility remains a concern.

 

The company’s material strategy is part of a broader response to an increasingly complex supply chain environment shaped by geopolitical disruptions and shifting demand. Jain described the current situation as “very dynamic”, where commodity prices—from aluminium to copper—are influenced by both macroeconomic conditions and sector-specific demand trends. “It’s a very complex play… I don’t think anybody today can take a definitive call,” he said.

 

Alongside aluminium, Ather is also working to reduce dependence on rare-earth materials, particularly those with concentrated supply chains. The company has already eliminated heavy rare-earth elements such as dysprosium and terbium from its motors and is exploring more reductions without compromising performance. This comes as part of a broader push to localise supply chains, with Ather working with Indian labs, suppliers and academic institutions on magnets, batteries, and power electronics.

 

Battery chemistry is another key lever in cost and supply-chain optimisation. The company’s upcoming platform will support both lithium iron phosphate (LFP) and nickel manganese cobalt (NMC) batteries, allowing flexibility depending on supply conditions. Analysts at Equirus note that a shift towards LFP could be structurally margin-accretive, as these cells are 15–20 per cent cheaper than NMC and rely on more abundant materials such as iron and phosphate.

 

The broader margin story is closely tied to scale. Ather has seen strong growth in recent years, with volumes expected to expand sharply as it moves beyond the premium segment into the mass-market convenience scooter category. Equirus estimates revenue compound annual growth rate (CAGR) of about 41 per cent over FY25–FY30, driven by volume growth and an expanding product portfolio.