Aditi Shah

NEW DELHI, (Reuters) – Ather Energy is India’s largest electric scooter manufacturer by revenue. The startup’s chief executive and co-founder told Reuters that Ather Energy plans to increase its annual production to 1 million scooters per year over the next 3 years due to a spike in demand.

Ather counts Tiger Global as an investor and Hero MotoCorp is a third, Tarun Mahta explained in an interview.

Mehta stated that although we had planned to focus our efforts on growth and not raising capital, the transition to electric was much faster than expected.

Ather declined to discuss the total amount that the company intends to raise. Sources close to the matter said that Ather wanted $133 million. Hero has raised $56million already.

India saw a fivefold increase in sales of electric scooters last year. This is due to high fuel costs pushing buyers to find alternatives. Government subsidies also narrowed the gap between gasoline and electric models.

Even though electric scooters and bikes accounted for just 1 percent of Indian motorbike sales, they accounted for just over 1 million of the total Indian bike and scooter sales in 2021. This is because the government seeks to cut its oil import bill, curb pollution and increase electric models to 40% by 2030.

Ather continues to build its military force amid growing competition from startups such Softbank (OTC). Group-backed Ola Electric recently raised $200 Million. Indian traditional bikemakers Hero, Bajaj Auto & TVS are also increasing their speed in developing clean mobility plans.

Mehta stated that Ather will increase its production to one million scooters annually over the next three-year period, from 400,000 at the end 2022 to 500,000 by the end, and install 5,000 fast charging stations across India. She also plans to develop new products, increase its reach to 600 shops.

His biggest concern is growing India’s supply network and persuading suppliers to invest in the electronic components, such as motors or controllers, for India’s emerging electric vehicle market.

Ather’s profitability is also likely to be affected by increased investment, as well as the speed of expansion. Mehta estimates that Ather will remain profitable for at least two more years.

According to him, “The Indian market is highly demand and supply has been constrained.”

Ather produces approximately 5,000 electric scooters per month, and also makes its own lithium-ion batteries. Mehta anticipates that production will increase to 22,000 scooters per month by 2022 due to increased demand from small cities.

He has a longer-term vision to invest in clean energy businesses.

He said, “The next thing I like is trucks and buses. It is low volume but huge energy consumption.”