Ather Energy faces difficulties with raw material and supply chain disruptions

Electric scooter maker Ather Energy says high production costs due to surging raw materials prices and supply chain disruptions are pushing back the profit timeline of the brand, despite high demand from consumers. Speaking about the company's growth projections, Tarun Mehta, CEO and co-founder of Ather said that he hoped the EV make would break even later this year, but that will require a few more quarters now due to the evolving disruptions.

Mehta expects the Indian EV industry to grow rapidly despite a recent spate of e–scooter fires across the country. The recent fire incidents triggered safety concerns around the EVs, prompting a federal investigation and have hurt demand for electric vehicles as well by denting the consumer sentiment. "It definitely shook the industry. I think we are still sort of coming out of it . .. it will take another 3 to 4 months before the industry really bounces back," he said to Reuters. However, Ather CEO also said that the EV company had not seen a dip in demand after the fires.

In the past few years, electric vehicles have witnessed a spike in demand as more people have been shifting to cleaner and greener transport solutions. However, a sharp price hike for commodity materials and severe supply chain disruptions have slowed the growth of EVs. India too is no different. The rapid surge in petrol prices prompted many customers to shift to electric two-wheelers instead of conventional ICE models. However, electric two-wheelers too have been witnessing rise in prices.

As Ather's boss claims, the company witnessed an addition of several hundreds of dollars in material costs, some of which have been passed on to the customers. production volume of the company has been hurt by a chip shortage and challenges in procuring lithium-ion cells for batteries, which emerged due to the recent Covid-19 outbreak in China.