Lack of PLI forcing us to delay launches, says Ather CEO Tarun Mehta

Ather Energy is now the third-largest e-scooter maker by volume and No. 1 by revenue, but warns that the PLI policy's exclusions are delaying launches and hurting innovation, says Mehta

With a 19.6 per cent share of the electric two-wheeler (e2W) market in October, and with its revenues up and losses down in the second quarter of 2025-26 (Q2FY26), Ather Energy is already in the top three — the third-largest player in the space — locking horns with TVS and Bajaj. The company’s Chief Executive Officer (CEO) Tarun Mehta talks about the opportunities and the challenges in the market in a video call with Surajeet Das Gupta. Edited excerpts:

 

Despite Ather increasing market share and reducing losses, do you think the electric vehicle (EV) market is growing as much as was expected or anticipated?

 

This festival season, the industry sold 1.5 lakh vehicles, which was on expected lines, despite the rare earth magnet shortage that constricted supplies and companies like us had many stockouts. If we had enough rare earth magnets, we could have easily sold more as demand was there.

 

Also, the numbers happened in the background of the largest change in price, with goods and services tax (GST) on internal combustion engine (ICE) scooters coming down by 10 per cent. Despite that, fears that demand could stall, it did not happen, which also shows how sustainable the demand for EVs is.

 

But is there a clear divide in electric scooter (e-scooter) on growth based on segments?

 

There are two segments in the market. The over ₹1 lakh segment, where we operate, has seen fantastic growth of 50 per cent over last year. But vehicles sold in the sub-₹1 lakh segment, on average, shrank and there was de-growth. This is healthy for the industry as EV is an upgrade market for those who want to move up from ICE scooters. There is no reason for our industry to decimate price points to sell to customers, and we should instead ride the wave of premiumisation. We don’t have to sell them deep discounted products, and it is clear that the volume growth that the industry had shown in the last one-two years in the sub-₹1 lakh segment was not sustainable. So, consumers disappeared as discounts went away, and there was price discipline.

 

The 15 per cent disability in cost, which you face because you are not eligible for the production-linked incentive (PLI) scheme for e2Ws, could be a big stumbling block for your growth. How big is this issue for you?

 

We remain confident that the government understands the issue. Last month, we were 1 per cent smaller in volume than the market leader, which, considering our higher average selling price, makes us the largest company in revenue terms. Yet, if the PLI, which is such an important policy of the government, does not support Ather, I think you are punishing the country. It is forcing us to delay product launches. For example, I could fast-track electric mobikes, but I am not doing so because I have to wait till the PLI policy ends.

 

So, you are saying it has led to a non-level playing field?

 

Yes. I think the result is that out of six companies (that are eligible for PLI), five have not even begun meaningful production or applied for certification of their vehicles. This is a big indictment of the policy. It has compelled us to stay away from entry-level markets, and forced us to delay launches and wait till the PLI policy ends to introduce more innovative products. That is because it does not make sense to face 15 per cent disability, and while you are giving it to ICE players, who don’t need it, you have hamstrung startups like Ather, River, and even JSW, who cannot apply for PLI.

 

The rare earth magnet shortage has, of course, impacted Ather too. How have you got over the challenge?

 

In heavy rare earth magnets, China has overwhelming control of its production. We have moved out our entire engineering from heavy rare earth to light rare earth magnets, where there are alternatives to China also. We looked at ferrite magnets but did not find it suitable for us because of the loss in power and increase in weight of our products.

 

What about cells?

 

Buying cells from China is fine, and from our perspective, we do not see any disruption here in the EV supply chain. What Beijing has done is cap production of cells from China to other countries by banning exports of equipment and raw materials. So, the road for having cell production in India, which I had earlier thought would take two years, will now take a much longer timeline.

 

You had said a few years ago that due to EV, the market in India would flip from the current 70-30 in favour of motorcycles to scooters. In this scenario, what are your electric mobike plans?

 

The flip is already happening. Scooters are now 40 per cent of the two-wheeler market. And, I think it will become 45-50 per cent within the next five-six years. But the electric mobike market is very important for our business, and we are already working on it. Currently, there is a lot of noise, and we don’t think electric mobike is a first-mover market like scooter.

 

Your largest shareholder Hero Motocorp is now the fourth-largest player in electric two-wheelers, and is also closing in on you. So, is there synergy possible to reduce costs like is done in cars?

 

Manufacturing investment in two-wheelers is not so deep as in cars, and form factors can be substantially different from each other in two-wheelers unlike in cars as platforms could be the same. Ather and Vida have different platforms, architecture, technology, and approach, and the end products are completely different. It had its own market and we are building ours. So, Ather and Hero operate independently. There can be synergies in this industry — like on standards, policy, advocacy and charging infra, and we have worked together here.