At a time when finance minister Nirmala Sitharaman made a slew of announcements last week to turbocharge the fledgling electric vehicles (EV) industry, smart electric scooter start-up Ather Energy is gearing up to expand to about 50 cities across the country in five years.
It also wants to take its scooters to global markets, including Latin America, Southeast Asia and Europe in the same period.
Backed by marquee investors such as Flipkart co-founder Sachin Bansal, Tiger Global and Hero Motocorp, the company is also looking at other business models such as rental and ride-sharing, leveraging the connectivity features in its scooters. The Bengaluru-based company has already introduced a lease programme for its scooters.
“I am extremely happy with the (Budget) announcement. I don’t think I was going to ask for more,” said Tarun Mehta, co-founder and chief executive of Ather, in an interview. “A product like this has to go global. I think, as companies like ours emerge, there is more of an opportunity to go international rapidly,” said Mehta, whose firm has raised around $100 million from the investors so far.
He said now the government needs to stimulate local production and supply chain. This includes incentives that help not just the original equipment manufacturers but also the supplier ecosystem.
“We can’t afford to get a lot of demands and have no local producers of these vehicles,” he said.
Mehta, who cofounded Ather Energy in 2013 with Swapnil Jain, said he commutes daily on an Ather electric scooter to his office located at a tech park which also houses firms such as Accenture, Byju’s and Swiggy in Bengaluru.
In June last year, Ather opened its flagship product Ather 450 for pre-orders in Bengaluru, while deliveries started in September. The company is now entering an aggressive expansion phase starting with Chennai and eventually expanding to 30 cities by the end of FY23. To meet the projected demand in the coming years, Ather is planning a new manufacturing facility, which will be designed to produce one million vehicles a year.
The company also plans to set up 6,500 AtherGrid fast-charging points across the country over the next five years.
Ather which has more than 350 people in research and development (R&D) has customized its smart electric scooter to Indian conditions and riding sensibilities. The company’s scooters are equipped with a touchscreen interactive dashboard and an integrated app which allows first in its category features like onboard navigation, remote diagnostics and over-the-air (OTA) updates for future improvements.
Mehta, a graduate of engineering design (dual degree 2012) from IIT Madras, said that as vehicles become intelligent and are connected, different kind of business models are going to emerge. Couple of business models the company might explore, he said, are rental and ride-sharing. It’s primarily because Ather’s smart scooters are connected and constantly throws up data related to the health the two-wheelers.
However, Mehta cautioned that at a time when there is so much focus and push towards EVs in the country, there is a risk of Chinese products flooding the Indian market. He said there is a need for EV companies to come together, engage more closely with the government and share learnings with the policymakers. “The industry needs to go electric for its own good. Chinese competition would kill us if we don’t build scale, volume and supply chain capability,” said Mehta.
Last Friday, Finance Minister Nirmala Sitharaman said during her budget presentation that the goods and services tax (GST) on EV will be reduced from 12 per cent to 5 per cent and the government will provide additional income tax deduction of Rs 1.5 lakh on the interest paid on the loans taken to purchase EVs. The government has also committed Rs 10,000 crore on FAME 2 (Faster adoption and manufacturing of hybrid and electric vehicles) which is expected to invigorate the EV industry and throw up opportunities for young ventures including Ather.