India can't be scoffed at by global chipmakers: Ather Energy's Tarun Mehta

'We are clocking a revenue of over Rs 100 crore a month. We hope to double that number in 2022-23', said Mehta

Ather Energy, one of the front runners in the electric vehicle (EV) race in India, on Thursday announced the completion of its Series E round of funding with the signing of investment agreements amounting to $128 million (or Rs 992 crore) with the National Investment and Infrastructure Fund (NIIFL) and Hero MotoCorp, along with other investors. Its Co-Founder and Chief Executive Officer TARUN MEHTA in conversation with Surajeet Das Gupta talks about the company’s next phase of growth. Edited excerpts:   

With this series, Ather has raised over $280 million. What will you do with this tranche of money and have you become a unicorn?    

Ather is not yet a unicorn, but has better valuations now.

One, the funding will be used to build capacity. The company is expected to increase its capacity from the existing 10,000 per month to 35,000 by the end of this year. A new plant is also being built. To reach the targeted 80,000-85,000 per month, a third plant will be needed.

Two, the money will be used to build two more platforms for electric scooters (e-scooters). We currently have just one. We are not working on a motorcycle right now.

Three, the cash will help support our 100-odd suppliers who provide us with customised components. We want them to increase their capacity to handle a production capacity of 60,000-70,000 scooters per month in a year or so. We will look out for acquisitions in technology in India and overseas.

Do you see your revenues going up this year?

We are clocking a revenue of over Rs 100 crore a month. We hope to double that number in 2022-23.

My projection is that if the chip shortage does not exacerbate, the industry should be able to roll out 100,000 scooters per month by the end of the year (currently, it is around 50,000).

Ather already has a robust retail sales network across the country, with presence in 32 cities. We plan to scale up to 100 cities by Diwali and have over 300 stores by 2023-24.

Will Hero MotoCorp continue to maintain its equity stake at the same level as earlier?

Yes, it will continue to maintain 35 per cent stake and has invested in this round of capital infusion as well.   

The industry is facing a crisis around components and chips. Given the limited volumes here, global chipmakers are not prioritising India. With viral videos of e-scooters catching fire, EV makers are trying to extinguish consumer anger. How serious is this issue? It seems to be leading to a slowdown in sales.

Six months ago, the situation was calamitous. For three months, supplies were hamstrung. But India is not to be scoffed at by chipmakers. We are a 30-million-per-annum electric two-wheeler opportunity. Our share might be small now, but each two-wheeler uses at least 50-100 chips. That makes it a large market. It is clear that the conversion to electric in the market is happening. It is unfortunate that the fires have happened, but this is a temporary setback. Booking orders for Ather Energy’s flagship product — the Ather 450X — are growing 25 per cent quarter-on-quarter.

How important is the NIIFL funding to Ather?

The switch to electricity is inevitable. 2021-22 was a watershed moment for electric two-wheeler adoption. We are very excited to have NIIFL come on board as investor. It has been at the forefront of the country’s green transition.