Tarun Mehta, CEO of Ather Energy, emphasized the necessity of extending subsidies for electric scooters in India for several more years to encourage the transition away from polluting motorcycles. He stated to Reuters on Saturday that industry experts view subsidies, including cash incentives, as essential for India to achieve its target of electrifying 70% of its two-wheeler fleet by 2030, as the country seeks to reduce its reliance on fossil fuels as the world’s third-largest oil importer.
Mehta mentioned in an interview that while Ather has managed to reduce its reliance on subsidies to a significant extent, this shift has resulted in nearly a year’s worth of suppressed growth. This statement alluded to the government’s unexpected decision in May to reduce cash incentives for e-scooters to a maximum of 15% of the purchase price before taxes, down from 40% previously.
Although India’s e-scooter market is still relatively small, it is gradually expanding, comprising 5% of total two-wheeler sales in the fiscal year 2023-2024. Ather, a pioneer in driving e-scooter adoption with its 450 series launched in 2018, has faced stiff competition from larger rivals like Ola Electric and TVS Motor, whose discounts have stimulated sales.
Despite being backed by Hero MotoCorp, India’s largest two-wheeler manufacturer, Ather is currently incurring losses. However, the company launched a new e-scooter named “Rizta” on Saturday, priced at 109,999 rupees (USD 1,321). The Rizta boasts a larger seat and storage space compared to its competitors, aiming to appeal to a broader audience in India’s densely populated northern and western regions, thereby driving sales.
Mehta highlighted that while Ather is prioritizing top-line growth, achieving higher sales volumes would lead to improved margins. Although the company has not yet reached breakeven, Mehta expressed optimism about the future and the potential role of the Rizta in enhancing margins, although he did not provide specific details.
