Hero MotoCorp to increase stake in Ather Energy to 39.7 percent

Bullish on demand growing rapidly for electric two-wheelers in India, overall two-wheeler market leader Hero MotoCorp is to invest an additional Rs 140 crore in the Bengaluru-based smart electric scooter manufacturer Ather Energy. This move will see Hero MotoCorp increase its equity stake by three percent in Ather Energy to 39.7% from the existing 36.7 percent.

Hero MotoCorp was the last of the three legacy two-wheeler OEMs to enter the EV market with its Vida electric scooter in October 2022, over two-and-a-half years after Bajaj Auto and TVS Motor Co launched their Chetak EV and the iQube, respectively, in January 2020.  

Ather Energy, which was incorporated in India on October 21, 2013, is engaged in designing, manufacturing, producing, selling, servicing, software development, and software management, in relation to electric vehicles and charging infrastructure, and also storage, distribution, and management systems of all forms of electric power (including energy in the form of batteries) and other ancillary services. 

Ather's rapid growth has been in tandem with that of the Indian electric two-wheeler market. The industry's cumulative January-November 2023 sales at 783,128 units are up 38% YoY and already a 24% improvement over entire CY2022’s sales of 631,461 units, with December still to add to the CY2023 tally. Expect the industry to surpass the 850,000 units mark for this year and set a new benchmark. 

As a result of  the sustained demand for its e-scooters, Ather’s turnover jumped 336% year-on-year in FY2023 to Rs 1,806.1 crore from Rs 413.8 crore in FY2022, and Rs 79.8 crore in FY2021.

In the first 11 months of CY2023, Ather Energy is currently the third-ranked EV OEM, after Ola Electric and TVS Motor Co. Between January and end-November 2023, the company had retailed 97,900 units, which gives it a 12.50% share of the all-India e-two-wheeler market. However, with an aggressive Bajaj Auto hard on its heels, Ather is getting ready to protect its turf with the launch of the new Apex 450 which is set to be the quickest and most powerful Ather yet.

Meanwhile, Ather has crossed the 100,000 sales milestone for the first time in a calendar year, a fortnight before CY2023 comes to an end. As per Vahan data, as of December 15, a total of 100,409 Athers have been sold in India between January 1 and December 15. 

GETTING FUTURE-READY

Ather Energy is well placed in terms of manufacturing capacity to cater to future demand. On November 23, 2022, the EV OEM inaugurated its second manufacturing plant at Hosur in Tamil Nadu, increasing its capacity to 4,20,000 units per annum.

The new plant, which employs 1,600 personnel, is twice the size of the first plant and has two vehicle and five battery lines. Increased automation levels mean assembly times are down by 20 percent.

In the first eight months of FY2024, Ather's production is up by 39% to 68,094 units (April-November 2022: 48,939 units). 

Ather Energy plans to expand its retail network from the existing 150 experience centre in 100 cities to 120 cities and 200 outlets by end-FY2024.

RETAIL NETWORK EXPANSION AND TWO NEW E-SCOOTERS COMING UP 

Ather Energy, which currently has a 13% market share (at the end of November 2023), aims to double its share to 30% with two new e-scooters which are slated for market introduction in FY2025. The company says it is developing a new platform, which will spawn a brand-new product before the festive season next year, and another model shortly after that. ​"We ​are going to introduce two strong products, very different from the Ather 450X, which is going to remain our performance line​," Ravneet Singh Phokela, Chief Business Officer, Ather Energy, told Autocar Professional in September.

"There are lots of other spaces that we haven't explored yet. There are the fun, family, and value segments. While the 450X continues to remain sharply focused on performance, at the same time, we are looking at getting out into new categories. That expands the market opportunity quite dramatically for us.

"We should have something in the market in the next three quarters (around Q1-Q2 FY2025), and another one a few quarters down the line​," added Phokela.

On the retail network front, Ather Energy at present has around 150 experience centres across 100 cities. It plans to expand the countrywide network to 120 cities and 200 outlets by end-FY2024. While it will refrain from going into deep rural areas, Ather Energy is confident that its upcoming products will strengthen its potential in Tier-2, Tier-3, and Tier-4 markets.

(With inputs from Mayank Dhingra)

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