Ather aims for the sky with new scooter, motorcycle platforms
HighlightsNew plant to have 1 million unit capacity, more than double of Hosur's 4.5 lakh units. Ather believes up to 40% of the two-wheeler market could be electric by FY2031, led by scooters. While present in Nepal and Sri Lanka, India remains the primary growth engine due to massive EV potential. Ather's EL and Zenith scooter platform to be launched from its new plant in Chhatrapati Sambhaji Nagar (Aurangabad), designed for cost optimisation and scalability.
Ather Energy
is betting big on its EL scooter platform which will be commissioned at its Aurangabad (now Chhatrapati Sambhaji Nagar) plant in Maharashtra over the next few years.
'We are very excited about this new platform. It is designed for cost first…it is cost-optimised from an architecture perspective which should hopefully allow us to launch more aggressively priced products,'
Tarun Mehta
, Co-founder and CEO of
Ather
, told ET Auto in a recent interview.
The EL platform is also being designed from a 'perspective of better scalability'. It makes tremendous business since it will allow Ather to build many more scooters potentially in the coming years. 'The more (scooters) we build, the more form factors we build and the more price points that we are able to get into will open up a lot of growth opportunities for our business,' he reiterated.
From Ather's point of view, almost 40per cent of the two-wheeler market, led by scooters, could be electric by FY31. And within scooters, its top management believes that the majority of new scooter sales will likely be electric by that point in time.
Upbeat about scooters
'In general, we are very bullish about scooters. Within two-wheelers, scooters have been outgrowing motorcycles for a while. This is why they have been gaining market share and we believe that is going to continue happening for a while,' he added.
There are also 'two fundamental truths' about electric scooters where this confidence is grounded. First, as Mehta said, they offer a better riding experience with lower vibrations and lower sound. They also feel like an upgrade with a lot of software that can come on to them.
We are very excited about this new platform. It is designed for cost first…it is cost-optimised from an architecture perspective which should hopefully allow us to launch more aggressively priced productsTarun Mehta, Co-founder and CEO of Ather
'So I think electric just feels and rides better which makes for a better product experience,' he added. Beyond this, the total cost of ownership of an electric scooter is 55per cent lower than that of a petrol scooter.
The unit economics is 'so astoundingly strong' that eventually for a customer it is going to get extremely difficult to turn a blind eye to the sheer unit economic advantage an electric option offers.
Betting on electric
'And because of these two fundamental truths, we believe that an electric transition, at least within scooters, feels and seems imminent. And that is what we are certainly betting on,' continued Mehta.
Whilst on the subject of scooters, Mehta said this product segment was starting to 'really fragment out'. Today, there are performance scooters, family scooters and lifestyle products too within buckets like the maxi kind, products focused on first-time buyers, women, delivery boys and so on.
'I think the market is really starting to mature now with a lot of diversity and choice available. This is why we feel that we should have a few multiple kind of scooters for this market,' said Mehta.
The new facility in Maharashtra will also be home to Ather's new Zenith platform for electric motorcycles. According to
Swapnil Jain
, Co-founder and Chief Technology Officer, motorcycle architecture has its own benefits like a bit more space, for instance, to package batteries. Quite unlike scooter architecture where a lot of space goes into creating the step-through, it (motorcycle architecture) does not have that necessity.
'We really want to ensure that every vehicle we build has a very strong character. In order to do that, you have to rethink about the vehicle architecture from scratchSwapnil Jain
Strong character
However, bigger wheels means the entire vehicle architecture has to develop 'sort of from scratch' and the way Ather goes about doing it is to be absolutely sure that the vehicle has a character. 'We really want to ensure that every vehicle we build has a very strong character. In order to do that, you have to rethink about the vehicle architecture from scratch,' said Jain.
The good news is that the company has 'thankfully had decent experience' of doing it which becomes an inherent advantage. Additionally, thanks to lower attrition, it has the benefit of 'folks who have built' the company's first 450 scooter still being onboard.
'A lot of the learnings stay with us. We know what we have done wrong and right and we also know how to build vehicles from scratch. And I think that is something which is very, very hard to learn and then being able to create the culture itself,' he added.
All in all, Ather is confident that it has developed 'massive strengths' in building the 450, followed by the more recent Rizta family scooter and now gearing up to develop the EL and Zenith platforms. 'Building new platforms from scratch is something which we have we have done at least twice before and are now in the process of doing it twice again. That is an advantage we will leverage going forward,' said Jain.
Scooters ahead of bikes
However, it is difficult to say if electric motorcycles will see the same kind of traction as scooters have. There are other startups which already have motorcycles to offer but scooters clearly have the edge at least for now.
According to Mehta, the electric motorcycle market is truly at a 'very, very' infancy stage right now. 'I fundamentally believe that there will be a lot more motorcycle buyers moving to electric scooters than one can imagine,' he said. Consequently, scooters will continue to gain market share over petrol-powered motorcycles even in the larger two-wheeler business.
'There are a lot of commuter bike buyers today who honestly would be better served with an electric scooter given their functionality and their utility advantages over a bike. But then there are obviously segments within motorcycles where you need that kind of posture, ergonomics, bigger wheels and you need the power that can only come with those bigger wheels,' said Mehta.
The present trend seems to indicate that the market will become a little bit more inclined towards scooters up to a certain performance level and perhaps motorcycles beyond that. 'But the proof will be in place when you see the market evolve. So we have to see some early launches and then learn from the experience,' he added.
So I think electric just feels and rides better which makes for a better product experienceTarun Mehta
Larger facility
The company is also getting ready for the inevitable changes at the Chhatrapati Sambhaji Nagar facility which is 'definitely much bigger' than its present operations at Hosur where the volumes and processes spawn 4.5 lakh vehicles annually. In contrast, the new facility's capacity will be over twice as much at one million units.
'Until now, we have been very focused on retaining a lot of agility in our operations. We did not want to go very heavy on capital expenditure decisions in the past because we wanted to first figure out what was the right kind of product and architecture that had to be developed,' explained Jain.
Now that the the business is maturing, the architecture is also maturing and Ather now has a better idea on the capex decisions that can 'actually give us a lot of benefits' and not come in the way of agility.
Besides vehicle and battery manufacturing, the new plant in Maharashtra will also be handling transmissions assembly. 'Painting is is the next big thing which we want to bring in because it helps us with a lot of flexibility in terms of any kind of variant(s) which we want to build. We will then be able to respond faster to the market,' said Jain.
Also Read:
Ather Energy raises ₹1,340 crore from anchor investors ahead of IPO
More opportunities
Having painting in-house will be especially helpful from the viewpoint of an increased number of variants which in turn can open up more opportunities. 'With more things being done in-house and supporting a larger volume, Maharashtra would be a a much bigger play than Hosur,' he added.
Jain admitted that this would be an all-new experience accompanied by its own set of challenges. 'Every time you want to do something bigger, there is always some discomfort attached to it. At the same time, there is no point thinking big without this (discomfort) coming along. The good thing is that Chhatrapati Sambhaji Nagar has a very good auto ecosystem similar to Hosur which becomes an advantage,' he said.
The skill levels are also pretty high in in this region which is another plus from the viewpoint of getting the right talent. 'Yes, it is a new territory, we will have to learn a lot of new things and deal with new challenges but I think that is part and parcel of growing big,' said Jain.
Will the next step for Ather include exploring new geographies? According to the CTO, there is 'enough and more' scope right now in in the Indian market itself. From an engineering standpoint, if something can be built for Indian customers and conditions, the product is then 'very much ready' for for any kind of market.
Also Read:
Lack of PLI has been an incentive for us: Ather's Tarun Mehta
Economies of scale
Clearly, there are a host of opportunities in the neighbouring ASEAN region even while Ather has already entered Nepal and Sri Lanka. 'We still believe that large growth will be coming from India. We would be keen on exploring export markets but most of the economies of scale are going to come from the Indian market itself where we have a huge huge gap to fill,' explained Jain.
Mehta was also categorical that Ather would stick to its core competence of electric two-wheelers even if opportunities were to crop up in the cargo space where quick commerce is literally booming.
'We are ultimately a consumer brand and I think what we do best is building a great experience for customers. Business, enterprise or delivery applications are a bit different and they are not on our radar today,' he said.
Apart from this, the fact remains that ultimately every company has limited bandwidth and it makes more sense to 'focus in the right direction' instead of distributing it over 'several possible angles'.
Electric the way forward
Asked if the two-wheeler segment should also keep other clean fuel options open, as is what is being seen in cars, Mehta said interim solutions 'are required only if the real solution is not adding up or is not making sense'. He reiterated that electric scooters made an enormous amount of sense since they save the customer money with lower total cost of ownership.
'They are a good riding experience. Products can be built out of them so they can be scaled up. Supply chains have lined up and the customers have greater awareness. So I think this is not the time to sort of get distracted with multiple technology investments and multiple customer adoption curves,' said Mehta.
On the contrary, this was the time to sort of focus and push the envelope together as an industry and 'certainly pure play EV players like ourselves will be pushing really hard'. Ather sees an enormous opportunity here to take the market towards complete electrification. 'We for one certainly do not believe that we need more interim transitional paths,' he reaffirmed.
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