Ather’s Konarc Bet Signals a Push Into Mainstream Growth

Ather Energy's new scooter Konarc is a broader bet for the electric two-wheeler maker to move beyond the relatively narrow customer base it has built around its technology-led products and compete for a larger share of India's mainstream electric scooter market.

Ather's challenge is not simply to sell a cheaper scooter. It is to enter a significantly larger and more price-sensitive part of the market without giving up the technology, software and engineering proposition that has helped distinguish it from established two-wheeler manufacturers.

Konarc is the first product on Ather's new EL platform, which the company says was developed with safety, serviceability and scale in mind. More importantly, the scooter fills a gap in Ather's existing portfolio that the company itself acknowledges - price points where it previously had no offering.

Bridging Portfolio Gap

"Rizta's cheapest variant with Atherstack Pro is priced around Rs 1.30 lakh. We were without a product at Rs 1.20 lakh," Ather co-founder and CEO Tarun Mehta said. According to him 45-55% of the electric scooter market is in the Rs 1 lakh-Rs 1.25 lakh price range, where Ather previously had no product. 

Today, Ather unveiled Konarc in two variants S and Z and six battery options. The Konarc S variant with 100 km range is priced at Rs 99,999, while its 125 km and S 161 km variants are priced at Rs 1.22 lakh and Rs 1.45 lakh, respectively.

The company expects that when all Konarc variants are rolled out over the next year, it could cover 80%-90% of the market with an offering. That makes Konarc less about adding another model to the line-up and more about closing a portfolio gap.

Ather's existing products, the 450 and Rizta, already cover a wide range of customer requirements, according to Mehta.

But the company found that there were customers for whom price was not the only missing piece. Some wanted longer rides and greater stability, while others were looking for a product that could fit more naturally into conventional scooter use. "Which is how Kona was found," Mehta said.

The opportunity is significant because the customers Ather is now targeting are different from the early adopters who helped establish the electric scooter category.

Ather's own assessment is that the questions surrounding electric vehicles have changed. Mehta said that when the company started, customers asked whether an electric scooter was powerful enough, reliable enough, or even practical. 

As adoption has grown, the questions have become more conventional - where to charge, how safe the battery is, how long it will last, how the vehicle will be serviced and what happens when it has to be eventually sold.

Those questions point to a more mainstream customer - and a different set of requirements from a company that built its identity around technology.

Premium Positioning

The response with Konarc is therefore not to strip the product down to reach a lower price. Instead, Ather has attempted to put more conventional attributes of a mass-market scooter alongside the technology it has developed over several years.

Mehta describes Ather's approach to being a premium brand in terms of what it can offer beyond basic hardware specifications. "For the same hardware spec... Same battery size, same motor size, same top speed, same range... Ather will always do more for the customer [compared to its competitors]," he said.

"Ather will always do more from a service perspective. From a quality perspective. Ather will do a lot more from the software and infrastructure perspective," he added.

The management says it is trying to take its premium proposition down the price curve. The company says it rebuilt its platform for the segment rather than simply adapting an existing product and discounting it.

Adapting Familiarity

Konarc gets a metal body, 14-inch wheels and onboard charging. The larger wheels and longer wheelbase are intended to improve stability and ride quality, particularly on longer journeys and poor roads. 

The company has also introduced a centre stand, a feature that is common across conventional scooters but was absent from Ather's earlier products. That is a departure in emphasis for a company better known for features built around software and connected technology.

The choice of a handlebar-mounted headlight is another example. Mehta said the decision came partly from feedback from dealers and customers who viewed a headlight mounted on the body as less representative of a mainstream family scooter.

"When we had, almost two and a half years ago, when we were getting ready to launch the Rizta, we gave a sneak peek to our dealers. Our dealers were like, everything is good, but the headlight is not in the handlebar," Mehta said.

He said similar feedback came from other markets, suggesting that some of Konarc's design choices were made to reduce the distance between an electric scooter and the conventional scooters customers are already familiar with.

The company is also using its existing technology stack to differentiate Konarc. The scooter gets an Advanced Electronic Braking System, or AEBS, which Ather says combines mechanical and electronic braking using its drive controller and braking algorithm.

The scooter also offers four range options - 100 km, 125 km, 160 km and 200 km, allowing Ather to offer different configurations around different usage patterns.

EL platform

Ather says the platform was built to support multiple products and was designed around safety, serviceability and scale. That could allow the company to expand its portfolio without having to develop an entirely new underlying architecture for every price point.

The significance becomes clearer when looking at Ather's ambitions for the segment. A company that wants to address a much larger portion of the market cannot rely solely on a small number of highly differentiated products. It needs an architecture that can support multiple models, volume, cost control and different customer requirements.

Serviceability is one of the areas where Ather says the new platform is intended to deliver that advantage. The company says Konarc's service interval is 10,000 km, compared with about 5,000 km for a typical scooter, while the number of service checkpoints has also been reduced. The vehicle was designed for easier assembly, which Ather says also makes it easier to service.

In a demonstration during the launch, the motor and transmission assembly was removed in 38 seconds and put back in 1 minute 33 seconds. Mehta acknowledged that service centres would not necessarily replicate the demonstration times, but said the architecture was designed to make servicing simpler.

This is significant because service is one of the areas where a new electric vehicle maker trying to reach mainstream customers has to compete with manufacturers that have spent decades building dealer and service networks.

Ather is therefore attempting to solve not only the product problem but also some of the ownership concerns that could prevent customers from switching from petrol scooters.

AtherStack Pro

The company expects software adoption to remain strong even as it moves into a more mainstream segment. Mehta said Ather initially expected AtherStack Pro attachment rates to fall as the company moved deeper into the market. 

Instead, he said, the pattern in several markets was that attachment rates rose as dealerships matured. For example, in Madhya Pradesh, he said, the rate initially stood at about 40% but eventually crossed 88%. Ather expects Konarc to follow a similar trajectory, although Mehta stopped short of treating that as a certainty.

There is also a commercial reason for Ather to get the equation right. The company expects Konarc to eventually generate better gross margins than Rizta. Mehta said he expects Konarc to have superior margins to Rizta over about one and a half years and suggested that the path to profitability could therefore be faster with Konarc.

That makes the product's positioning particularly important. Ather is trying to add volume without turning Konarc into a low-margin entry product that undermines its economics.

For now, the company is not putting a specific first-year sales target on Konarc. Mehta said the immediate priority was production, arguing that demand currently exceeds what Ather can produce.

Konarc gives Ather a product aimed at a much broader part of the market, but entering that market means competing not only with other electric scooter makers but also with the habits and familiarity built around established petrol scooter brands.

Ather's answer appears to be to make the transition less radical. The company is retaining the software and engineering features that it believes differentiate its products while adding the design, practicality, stability, charging flexibility and serviceability that could matter more to an everyday commuter.