CEO Tarun Mehta on how Ather achieved $100-mn revenue run rate in a year

How does Ather Energy CEO Tarun Mehta see the EV two-wheeler space evolving in the coming months, and how is his company scaling up capacity to benefit from it? How did Ather Energy achieve $100-million annual run rate in less than a year to become possibly India's biggest EV two-wheeler maker by revenue? How close is the company to breaking even? In this exclusive interview Mehta discusses all these and more with Business Standard's Surajeet Das Gupta. Highlights of the Q&A:
 
You being one of the first to be in the two-wheeler EV space, where do you see this segment going forward?
 
·        Initial goal: Sway a Honda Activa buyer towards EV
·        EV prices are comparable to petrol alternatives
·        EV space to grow at 14-15% m-o-m for the next three to five years
·        Majority of scooters in India are likely to be electric in the next four years
 
What are your expansion plans?
 
·        Ather Energy growing over 20% m-o-m since Nov 2020
·        Suppliers asked to quadruple their capacities
·        Expanding on new production line and ramping up capacities across the board
·        Presently 23 experience centres in India
·        Estimated 120 to 150 retail outlets by end of 2022
 
How many cities do you plan to have presence in?
 
·        Ather Energy is present in 24 cities in India
·        Estimated to have presence in more than 100 cities by next Diwali
·        Around 140 outlets by the same time
·        Aim: Scale up monthly production to 25,000 to 30,000 units
 
For this kind of ramp up, you will require more investment. While all kinds of startups have got some fancy valuations, the valuation of two-wheelers and asset-rich companies they have not really gone up. How are you addressing this?
 
·        Product businesses require time and effort to set up
·        Ather is the first hardware startup in India to cross the $100 million run rate in a year
·        Ather is the largest EV two-wheeler company in India by revenue
 
With this kind of pace when do you think you can break even?
 
·        In the next couple of years, Ather expects to reach positive EBITDA
·        This doesn’t account for the expansion triggered by new product lines in international markets
 
When you say $100 million run rate, what are you expecting in terms of actual revenues?
 
·        Ather retail revenue for Oct 2021 – Rs 64-crore
·        Retail revenue to cross Rs 100-crore in the next 3/4 months
 
Ola have, in many ways, attempted to disrupt the two-wheeler market and looking at a capacity of 10 million, which is almost half of entire two-wheeler market in India. How do you see that as a competition for Ather?
 
·        Ola’s announcement helped EV sales to increase by 60% in last 2/3 months
·        Response more from Tier-II and Tier-III cities
·        Announcements help people to be aware and excited about electric mobility
·        Competition improves supply chain and business viability
Competition brings down prices and production timelines