"EL is a lower-cost architecture for us,” Tarun Mehta told analysts during Ather Energy’s Q3 FY26 earnings call, a remark that comes as the company narrowed EBITDA losses to just 3% and delivered its strongest quarterly performance so far.
02 Feb 2026 | 250 Views | By Mukul Singh, Kiran Murali & Darshan Nakhwa
For much of its journey as an electric two-wheeler maker, Ather Energy’s product roadmap has been closely tied to improving unit economics in a young and volatile EV market. In the December quarter, however, the commentary around the upcoming EL platform suggested a shift in emphasis shaped as much by ...
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For much of its journey as an electric two-wheeler maker, Ather Energy’s product roadmap has been closely tied to improving unit economics in a young and volatile EV market. In the December quarter, however, the commentary around the upcoming EL platform suggested a shift in emphasis shaped as much by timing as by technology.
In Q3 FY26, Ather reduced EBITDA losses to (-3%), reported adjusted gross margins excluding incentives of 23%, and lifted non-vehicle revenue to 14% of total income. Revenue was just shy of ₹1,000 crore, while volumes stood at about 68,000 units. Together, the numbers point to a business that is already showing operating leverage from its existing portfolio.
Against that backdrop, EL is not being framed as a corrective tool for margins, but as a platform intended to support the next phase of scale.
“EL is a lower-cost architecture for us, which is something we can then use to lower our entry price points without losing a strong margin expectation,” Mehta said, underlining that cost efficiency and margin discipline remain central to the platform’s design.
A recurring theme through the call was Mehta’s effort to decouple EL from Ather’s near-term profitability narrative. Rather than positioning the platform as essential to sustainability, he repeatedly pointed to the strength of the current lineup.
“We believe that the current portfolio should be strong enough to take us to a sustainable basis standalone,” Mehta said. “EL always has been the product that drives future growth, as opposed to a product that we desperately need to get to break even.”
That distinction is reinforced by the pace of improvement already visible in the numbers. “The biggest story for us, frankly, was the EBITDA improvement,” Mehta said. “EBITDA improved by 1,600 basis points year-on-year and 700 basis points quarter-on-quarter to land up at negative 3 overall.”
Mehta also stressed that Ather has been “extremely disciplined, almost paranoid, about adding fixed costs” even as volumes scale, helping translate gross margin gains into sharper EBITDA improvement.
The call also made clear that EL is being planned alongside, not ahead of, Ather’s distribution expansion. The company ended Q3 with 600 experience centres and remains on track to reach 700 stores by the end of FY26.
“We had estimated that about 600 and now 700 stores are independently viable, comfortably, with just Rizta and 450 alone,” Mehta said. “And honestly, with the expanding market, that number is going up.”
EL is positioned as the next lever in that equation. “With a better price point and a more fungible and flexible platform in EL, we believe the markets in particularly North India could open up materially to us,” Mehta said, adding that distribution growth would continue “in sync with it.”
Ather’s manufacturing plans for EL further underline this approach. Rather than tying the platform’s launch to a single facility, the company has retained flexibility on where initial production could begin.
“We are open to starting EL out of the Hosur premises to de-risk potential timelines,” Mehta said. “If required, we will be ready to start EL out of Hosur itself to get the initial traction going while we continue scaling it via ORIC.”
The Q3 numbers provide the context for that confidence. Ather reported revenue from operations per unit of ₹1.4 lakh, continued improvement in cost of goods sold, and a rising contribution from high-margin non-vehicle revenue streams led by software.
“Ather’s non-vehicle revenues are already up at 14% in Q3, which is obviously our highest ever,” Mehta said. “Given that most of the non-vehicle revenues end up accruing superior gross margins, the contribution to gross margins is much higher.”
Software attach rates stood at 91%, remaining stable even as volumes have scaled sharply over the past six quarters, reinforcing the underlying unit economics ahead of EL’s introduction.
Taken together, Ather’s Q3 commentary suggests that EL is arriving at a different point in the company’s lifecycle. Rather than being asked to fix margins, the platform is being layered onto a business that has already stabilised its fundamentals and is now looking to scale them.