Ather Energy is exploring whether to accelerate the second phase of its upcoming Aurangabad manufacturing facility as demand for electric scooters continues to outpace expectations, with the company saying its planned capacity could come under pressure if current growth trends persist.
The company’s co-founder and CEO, Tarun Mehta, said the company has begun considering an earlier rollout of Phase 2 after a sharp rise in demand in recent months. He added that the recently completed Rs 2,500-crore fund raise gives the company the flexibility to move ahead with the expansion without waiting for Phase 1 to mature.
- EL platform based family scooter to launch on August 29
- EL production to initially begin from Hosur, before shifting to Aurangabad
- Ather’s electric bike still quite a ways away
Aurangabad Plant to Add 5 Lakh Units Annual Capacity
The comments come as Ather prepares to commission the first phase of its Aurangabad, or AURIC, manufacturing facility in a couple of months. The company currently manufactures electric scooters from its Hosur plant, which has an annual production capacity of 4.2 lakh units. Mehta said the facility is now operating at almost full utilisation following steady production ramp-up during the first quarter.
Once the Aurangabad plant comes live, it will add another 5 lakh units of annual capacity, taking Ather’s total manufacturing capacity to 9.2 lakh units a year. He added that the Aurangabad facility is progressing as planned, with the assembly line already installed, the paint shop under trial and warehouse and utility work nearing completion ahead of commercial operations later this year. However, Mehta said even that may prove insufficient if the current pace of demand continues.
“GoLive of Auric will take our total capacity up from 4.2 lakh units to 9.2 lakh units later this calendar year. But we believe demand is ramping up very fast. 9.2 lakh units per annum is only 77,000 units a month. We believe on current demand trajectories, even this may be tight in the coming quarters. Which is why I think we were lucky here when we took Aurangabad land. We took a larger land capacity and we had always planned for Auric phase two,” he said.
EV Demand Outpaces Supply
Demand has risen sharply over the past few months, according to the company, resulting in supply constraints across several markets. Mehta said dealer inventories have fallen from 14 days to just three days, while some dealerships have temporarily stopped accepting fresh pre-orders because waiting periods have stretched to around two months or more. The company estimates it could have retailed another 13,000 to 15,000 scooters every month if sufficient production capacity had been available.
“There are 50,000 pre-orders, despite the fact that in many states now, our dealers are no longer even accepting new pre-orders, because the waiting times are now hitting two months or even higher. The underlying demand we strongly believe is very, very high,” Mehta said. “We believe today that of the 30,000 units that we retail average in Q1, we could have probably sold an incremental 13,000 to 15,000 units extra every month.”
New EL Scooter Platform Set to Launch on August 29
Ather expects demand to receive another boost with the launch of its first new scooter based on its brand-new EL platform on August 29. Production of the vehicle has already begun at the Hosur plant, homologation has been completed and high-volume trials are underway.
Initially, production will continue from Hosur before gradually shifting to Aurangabad as the new facility ramps up. The company plans to scale manufacturing capacity for the EL platform to about 60,000 units a month across the two plants. The EL platform will underpin multiple future scooter models and forms part of Ather’s strategy to expand production and meet rising demand for electric scooters.
Ather electric bike still at least 2 years away
Even as it prepares to debut a fresh onslaught of new products based on its EL platform, Ather Energy has no plans to enter the electric motorcycle segment in the near term. According to Ather Energy co-founder and Chief Executive Officer Tarun Mehta, the company’s strategy is to first concentrate on rolling out products based on its new EL platform before entering the electric motorcycle space.
“At this point, we are focused on the EL platform and getting at least the first, maybe two products, maybe another product out on it in the next year,” Mehta said to investors. Ather had earlier said it is developing a dedicated motorcycle platform, codenamed Zenith, alongside its EL scooter architecture. The comments indicate that Ather is now taking a measured approach towards a segment that is still at an early stage of adoption.
“Motorcycles are starting to look interesting. But Ather may not be the pioneer this time. We may watch the market. We want to see how consumers respond, which segments show a willingness and an interest towards the segment before we make our maiden launch here,” Mehta said.
He added that an electric motorcycle from Ather is not expected anytime soon. “So this, I would say, more than a year away, for sure. Probably two years plus.” he said. The company’s strategy comes at a time when India’s electric two-wheeler market continues to be led by scooters, while electric motorcycles account for only a miniscule share of overall EV sales.
Royal Enfield has begun sales of its Flying Flea C6 electric motorcycle on a small scale, while startups including Ultraviolette, Revolt and Oben are expanding their presence. Other legacy players like Bajaj Auto and Hero MotoCorp are also developing their own electric motorcycle platforms, although a debut from either brand is still some time away. Ather, however, plans to observe how the market evolves before committing resources to the category.
