Ather Energy, which has Tiger Global and Indian bikemaker Hero MotoCorp as investors, has raised roughly $160 million since its creation in 2013 and is in the process of raising more, says company CEO Tarun Mehta.
One of the leading electric scooter makers in India, Ather Energy is soliciting funding to increase yearly output to 1 million two-wheelers over the next three years due to increased demand.
Tarun Mehta, who is the CEO of Ather Energy, claimed that the company, which has Tiger Global and Indian bikemaker Hero MotoCorp as investors, has raised roughly $160 million since its creation in 2013 and is in the process of raising more.
“Our plan was to not raise more capital and focus on growing the brand, but the rate of transition to electric and the pace at which the supply chain and capacities need to ramp is way faster than what we thought a year back,” Mehta said as reported by Reuters.
However, even though the CEO didn’t disclose the amount the company plans to raise, a person familiar with the matter reportedly said that Ather is seeking $133 million—Hero has already contributed $56 million to the fund.
In 2021, sales of electric scooters in India increased by more than fivefold, as high fuel prices prompted purchasers to explore alternatives, while government incentives helped to close the price gap between electric and gasoline versions. In December last year, India also witnessed a significant surge in electric vehicle sales, the majority of which is two-wheelers.
Despite that, according to the report, electric two-wheelers accounted for only 1 per cent of overall motorcycle and scooter sales in India, which totalled 14.5 million in 2021. As part of its efforts to lower its oil import cost and minimise pollution, the government expects this to reach 40 per cent by 2030.
It was also reported that Ather is also beefing up its cash reserves in the face of increasing competition from startups like Ola Electric, which recently raised $200 million, as well as India’s top two-wheeler manufacturers Hero, Bajaj Auto and TVS, all of which are accelerating their clean mobility plans.
According to Mehta, by the end of 2022, Ather wants to boost its yearly production capacity from 400,000 to 1 million scooters, install 5,000 fast chargers across India, develop new models, and expand its network to 600 stores. He also believes that the most challenging issue is growing the supply chain and persuading suppliers to invest ahead of time in electronic components such as motors and controllers for India’s nascent EV sector.
Ather’s profitability will be delayed by the required investment and expansion rate, which Mehta estimates will take another two years. Currently, the EV maker produces 5,000 electric scooters per month and makes its own lithium-ion battery pack. In 2022, Mehta plans to increase production to 20,000 scooters per month, as a boom in demand is noticed in smaller cities.
His long-term goal is to invest in companies that help people use more sustainable energy. Additionally, he said that “the next thing that excites me is trucks and buses – it is a low volume but massive energy consumption”.
Source: PTI
