Ather Energy targets production of one million electric scooters annually
Electric scooter startup Ather Energy is working on raising funds to ramp up its annual production capacity to one million scooters over the next three years as it has been witnessing a surge in demand, the company's co-founder and chief executive Tarun Mehta told Reuters.
The capacity will be increased from the 400,000 by the end of 2022. Ather Energy also aims to install 5,000 fast chargers across the country, develop new products and increase its network to 600 stores.
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Ather Energy, which is backed by Tiger Global and Hero MotoCorp, has raised about 12 billion rupees ($160 million) since its inception 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.
The company is looking to raise about $133 million in funding, of which, it has already raised $56 million from Hero, Reuters cited a source.
Sales of electric scooters surged more than five times in India last year due to high fuel prices that pushed people to look for alternatives. Government subsidies helped narrow the price gap between electric and petrol scooter models. Even so, electric models made up just 1% of total Indian motorcycle and scooter sales of 14.5 million last year. However, the government wants this share to reach 40% by 2030 as it looks to reduce its oil import bill and curb pollution.
The biggest challenge that Mehta sees is growing the supply chain and convincing suppliers to invest ahead of time in electronic components like motors and controllers for the country's nascent electric vehicle market. The required investment and pace of expansion will also push back the company's profitability, which Mehta expects is now another two years away. "The demand is massive, and the Indian market has been supply constrained," he said.