Ather's capacity catchup could take another 3-4 quarters: CEO Tarun Mehta

The company has monthly demand of more than 50,000 units, while present supply capacity is around 35,000 scooters a month, Tarun Mehta told Business Standard

Electric two-wheeler (e2W) maker Ather Energy expects demand for its electric scooters (e-scooters) to continue outstripping its production capacity for another three to four quarters, even as it ramps up manufacturing at its new Aurangabad plant, its Cofounder and Chief Executive Officer Tarun Mehta told Business Standard on Saturday. 

The company currently has monthly demand of more than 50,000 units, with the launch of its new Konarc scooter expected to widen the gap further. 

Ather’s present supply capacity is around 35,000 scooters per month. The company expects to take this to a maximum of 77,000 units a month once Phase-I of its Aurangabad facility is operational, alongside its existing Hosur plant. Phase-I is expected to go live by the end of this year and will then take about two quarters to reach maximum output, Mehta said. 

 

“Dealer inventory is basically all hand-to-mouth. And it will stay hand-to-mouth for another three to four quarters because even as Aurangabad Phase-I goes live, we do estimate that demand will continue to outstrip supply for possibly one year. So yeah, demand is healthy,” he said during an interview with the newspaper on the sidelines of Konarc’s launch on Saturday. 

Konarc is Ather’s first production scooter based on the new EL platform. With Konarc, the company has moved deeper into the mass-market e2W segment. Priced from ₹99,999 (ex-showroom Bengaluru), the family-oriented scooter is positioned below Ather’s existing portfolio and will be offered in multiple variants, with range starting at 100 kilometre (km) and going up to 200 km in a forthcoming version. 

Mehta on Saturday said Ather has slowed down the opening of new stores because it does not want dealers to invest in outlets that Ather cannot supply adequately. He said the priority for now was to maintain the profitability of existing dealers. Once additional production capacity becomes available, the company plans to restart store expansion rapidly. 

“We are already, even as of last quarter, seeing demand of more than 50,000 units per month. And that’s before we open up more stores and that’s before we bring in Konarc. So I do believe that demand will continue to outstrip supply for the foreseeable future,” he said. 

Konarc’s new architecture replaces the aluminium frame used in the previous two lines — 450 and Rizta — with a steel frame, and replaces belt transmission with an enclosed gearbox. 

Transmission is the system that transfers power from the motor to the wheel. Mehta said these changes make the new platform more scalable and give it a better cost structure. 

Ather has combined its motor controller and charger into a single unit, while the new factory will have greater vertical integration, meaning more manufacturing activities will be done in-house. Painting, transmission assembly, and electronics box builds are among the activities planned internally, he explained. 

Mehta said Konarc was conceived primarily to persuade petrol scooter owners to switch to electric vehicles (EVs), rather than simply attracting more customers already considering an e-scooter. He estimates that e-scooters account for around 25 per cent of the scooter market, leaving a much larger petrol-powered customer base that Ather wants to target. 

The company on Saturday also announced an extension of its battery warranty to 10 years, with a 70 per cent range guarantee, across all its scooters and variants. Ather’s maximum warranty currently stands at eight years. Mehta said the longer warranty is aimed at addressing concerns among petrol scooter buyers about battery life, one of the factors holding them back from switching to electric. 

The new model could also change Ather’s sales mix. Mehta expects Rizta to remain the company’s largest seller for the next few months because its production capacity is already established. However, as Konarc production increases, he said the new scooter could match or exceed Rizta’s volumes because it will cover lower price points. 

Ather expects some cannibalisation, or customers shifting from one Ather model to another, particularly for Rizta. Mehta said he expected this cannibalisation to be meaningful, although he could not estimate the extent. He expects Konarc to have a bigger role in northern India, while Rizta should remain strong in southern and western markets. 

Mehta also linked the company’s pricing strategy to the government’s PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM eDRIVE) scheme, under which e2Ws receive a purchase incentive. The scheme has been extended until March 2028. He said the ₹5,000 incentive provides an important buffer for manufacturers at a time when raw material costs have risen sharply. 

He said commodity inflation has affected EVs more severely than petrol vehicles. Without the incentive, companies would have had to pass more of those costs on to consumers, potentially making e-scooters more expensive and slowing adoption. 

“The ₹5,000 subsidy — though not very large — provides a very much-needed buffer so that we don’t have to push up prices. If in a year’s time commodity prices do start cooling down, then I think this would be a good transition (from the PM eDRIVE scheme to no scheme),” he said. 

Mehta expects commodity prices to remain elevated for another couple of quarters but believes they are close to a peak. He expects some materials to become cheaper next year, particularly rubber, plastics, aluminium, and lithium hydroxide.

Copper, he said, has become expensive, while memory chip prices are facing a more structural increase and could take longer to cool.