by Deepak Kaistha __
Ather – A Breath of Fresh Air | New Poster boys of New India
Ather Energy plans to enter new markets and also grow its portfolio to cope with the impending competition in the electric two-wheeler market. It’s one of the dream entrepreneurial success stories that India would love to celebrate. Instead of the conventional categories like software, aggregators, fintech, etc – Ather is a breath of fresh air.
Its founders – IIT Chennai graduates Tarun Mehta and Swapnil Jain – chose nuts and bolts science over air-conditioned computer terminals.
They are certainly poster boys of New India that envisions getting ahead of the curve in futuristic ‘hard’ categories like electric vehicles rather than remaining largely a services hub.
Hero MotoCorp owns one-third of stake in the company, which has received US$ 66 million of funding so far. Other investors in Ather include Tiger Global and Flipkart founders Sachin Bansal and Binny Bansal.
While they have received tremendous accolades for their innovation, the company is now well into the business end of its life cycle, where it could be severely tested in the market – both by customer inertia and emerging competition.
Ather Energy is planning to raise additional funding of Rs 300-400 crore over the next year according to a source. The funds will reportedly be leveraged to support its expansion to markets like Chennai and Pune. In a statement to Mint, the source claims that the company will set up experience centres in the two cities for potential customers to examine the product and place orders. At a future stage, the company is also planning to enter New Delhi.
The funds are also crucial for expansion of manufacturing capacity from 20,000 scooters presently. Ather is in the process of developing a new range of electric scooters by leveraging a new platform that should hit the markets by 2020-2021. It is also looking to enter the electric motorcycle market soon.
Ather Energy has strategic value for Hero MotoCorp, which has invested Rs 335 crore in two tranches in Ather. Hero does not have its own electric two-wheeler portfolio, and for that matter, no major two-wheeler maker has developed an electric two-wheeler in India.
While the market is nascent currently, the company is looking at bringing in a larger portfolio to be able to tackle the competition once growth kicks in. Bajaj Auto, for instance, is planning to have EVs in two, three and four-wheeler categories by 2020.
In addition, the company is working on Ather Grid, wherein it is setting up charging stations for additional revenues. Some of these are already being set up in Bengaluru. They will be crucial for customers to accept electric scooters as a viable alternative in the coming years.
Electric two-wheelers have immense futuristic value in India, where the segment accounts for 70% of the total number of vehicles, and consequently to pollution. Tarun Mehta, Co-founder & CEO, Ather Energy predicts, “EVs are highly efficient and we expect that emissions will be cut by half with more usage.”
While EVs are at least 30% more expensive compared to conventional vehicles at present, costs are expected to come down as the volume grows.