Ather Explores Accelerating Aurangabad Phase 2 Expansion if EV Demand Surges Continue

Ather Considers Fast-Tracking Aurangabad Phase 2

Ather Energy is exploring whether to accelerate the second phase of its upcoming Aurangabad manufacturing facility as demand for electric two-wheelers continues to outpace expectations, with the company saying its planned capacity could come under pressure if current growth trends persist.

Ather Energy co-founder and Chief Executive Officer 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.

"We did start thinking about this as a potential requirement, which is also what played a role in how we sized up our fundraise. So the overall Rs 2,500 crores in our mind also gives us the wherewithal to fast-track AURIC phase two without necessarily waiting for more proof of phase one. So we'll see in the coming couple of quarters if this trajectory holds up, I would not rule out a phase two fast-tracking, quite a material fast-tracking," Mehta told investors.

The management, however, said they are yet to take a final decision on fast-tracking the phase 2 expansion.

"We don't want to start phase two today or start giving guidance or a timeline today because it just feels like we should be a little bit more cautious. Just see phase one, at least go live in the next few months and then get going with phase two. So right now we are in the planning stage for phase two. If all looks well, maybe in a quarter or two max, we will have more formal timelines and guidance to share," he said.

Aurangabad (ORIC) Plant to Add 5 Lakh Units of Capacity

The comments come as Ather prepares to commission the first phase of its Aurangabad, or ORIC, 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, or about 35,000 units a month. Mehta said the facility is now operating at almost full utilisation following a 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 larger land capacity and we had always planned for Auric phase two," he said.

EV Demand Outpaces Supply: Ather Says It Lost 13,000-15,000 Sales a Month

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 new EL scooter platform later this month. Production of the new platform 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 new scooter, whose commercial name will be unveiled shortly, will be launched on August 29.