Ather Energy, a prominent player in the electric vehicle market, is gearing up for significant expansion. CEO Tarun Mehta recently shared insights into the company’s future plans, including a bold target of achieving a 20 percent market share in the near term. This ambitious goal is underpinned by the introduction of their innovative EL platform, set to revolutionize e-scooter production.
The announcement came during the Ather Community Day in Bengaluru, where Mehta unveiled the EL platform, designed to produce a diverse range of e-scooters for multiple segments. The first product stemming from this cutting-edge two-wheeler architecture is slated for release next year, promising a new era for Ather Energy and its consumers.
Mehta highlighted the critical importance of supply chain diversification. The automobile industry has recently faced challenges due to restricted supplies of rare earth elements and magnets. These materials are vital for electric vehicles and electronics, and their limited availability has impacted manufacturers globally.
China, a dominant supplier of these minerals, had restricted their supply in April, causing significant ripples within the domestic automobile industry. This incident underscored the fragility of relying on a single source or country for essential components.
“I think the issue of restricted supply of rare earth magnets is sorted out for now,” Mehta stated in a post-launch interaction. “But I think the better answer now is to move away from heavy rare earths to at least light rare earths, which is what we are trying to do at Ather. And the faster we get away, I think the better we will all be.”
The world is increasingly volatile, and Mehta believes in strong hedging strategies. “We need more hedging,” he emphasized. “We need to hedge different countries; we need to hedge different suppliers altogether.” This proactive approach is crucial in mitigating risks associated with global supply chain disruptions.
“This old model of one supplier, one country is too dangerous these days. You can’t count on that,” Mehta explained. “So we are working on supply chains and technology directions which give us more options rather than locking us down into one geo or one supplier.”
The EL platform is a game-changer, not just for its versatility but also for its cost-effectiveness and efficiency. Mehta revealed that the new platform significantly reduces the number of parts in an e-scooter to just 15 at the vehicle level. This simplification translates into a 15 percent faster assembly process and an overall 15 percent reduction in production costs at the assembly level.
“EL has a lower cost fundamentally because its transmission is a lower cost architecture,” Mehta elaborated. “And its frame is a unibody steel chassis instead of a bolted aluminum frame. Those two things put together basically mean that the cost is lower.”
Further cost reductions have been achieved through innovations like their charge drive controller, which integrates the charger and motor controller into a singular pack. This consolidation further streamlines production and lowers expenses. The EL platform is expected to play a substantial role in improving Ather Energy’s margins in the coming years.
Ather Energy currently commands a 17 percent share in the domestic electric two-wheeler market. This impressive figure represents a doubling of their market share compared to the April-June quarter of last year, showcasing their rapid growth and increasing influence. The company’s target of a 20 percent market share in the near term seems well within reach given their current momentum.
Mehta pointed out that Ather Energy’s leadership extends beyond Southern India, with strong market presence in Gujarat and the North-east. “There are many cities all over north where we are market leaders,” he noted. “So I think the real opportunity for us and the real need for us is to keep focus and keep adding more and more stores. As that happens, our market share should inch up.”
To facilitate this expansion, Ather Energy currently operates 416 outlets across India, with an ambitious near-term target of reaching 700 outlets by March next year. The company has been aggressively expanding its retail footprint, adding 180 stores in the last two quarters alone. This strategic move aims to enhance accessibility and cater to a broader customer base.
Charging infrastructure is another critical aspect Mehta addressed. He emphasized the importance of standardizing charging facilities across the country to accelerate EV demand. He also highlighted the need to fill existing gaps in charging facilities, suggesting at least one charging point in every apartment complex.
“I think we also need to do a lot more work on standards,” Mehta stressed. “We talked today about how our charging standard is now a national standard, but that’s honestly a rarity. It’s still not driven hard enough.” Standardization will be key to a seamless and widespread adoption of electric vehicles, ensuring convenience and reliability for users.