Ather Energy, a Bengaluru-based electric vehicle (EV) manufacturer, has emerged as a significant player in India’s electric two-wheeler market. Founded in 2013 by Tarun Mehta and Swapnil Jain, Ather Energy has been at the forefront of innovation, sustainability, and performance in the EV sector. The company’s journey from a startup to a unicorn is a testament to its commitment to transforming urban mobility. As Ather Energy prepares for its …

Initial Public Offering, it marks a pivotal moment in its growth trajectory and the broader EV market in India.

Company Overview

Ather Energy’s flagship products, the Ather 450X and Ather 450 Plus, have set new benchmarks in the electric scooter segment. These models are known for their advanced features, including high-performance lithium-ion batteries, fast charging capabilities, and smart connectivity options. The company’s focus on research and development has enabled it to introduce cutting-edge technology and design, making its scooters popular among urban commuters.

THE LAUNCH OF RIZTA ELECTRIC SCOOTER

Ather Energy‘s growth has been fueled by significant investments from prominent backers, including Hero MotoCorp and Tiger Global. The company has also expanded its manufacturing capabilities with a state-of-the-art facility in Hosur, Tamil Nadu, which has an annual production capacity of 110,000 scooters. This expansion is part of Ather’s strategy to meet the growing demand for electric vehicles in India.

Market Position and Competition

In the competitive landscape of electric two-wheelers, Ather Energy faces stiff competition from players like Ola Electric, TVS Motor, and Bajaj Auto. Despite this, Ather has carved out a niche for itself with its premium offerings and strong brand presence.

The company’s focus on quality, performance, and customer experience has helped it capture a significant market share. As of August 2024, Ather Energy holds a 12.2% market share in the Indian electric two-wheeler market.

Although it might seem that Ather has a very long way to go and Ather could find it difficult competing against TVS and Bajaj… this is not true. This is because both TVS and Bajaj are handicapped by their expertise in old Petrol Scooter Technology.

Their expertise in Old PETROL/DIESEL Technology will prevent them from expanding exponentially in NEW Electric Technology.

This is exactly the same reason which killed some of the biggest companies in the world, companies like:

• Type Writing Machine Companies with the advent of Computers,
• Kodak with the advent of Digital Camera & SmartPhones,
• Nokia & Blackberry with the advent of touchscreen phones, etc.

TVS and Bajaj make vehicles other than electric vehicles which give them more profit than selling eScooters. So they are not too much interested in EV business. Both TVS & Bajaj have launched FlexFuel bike and Bajaj has launched the CNG bike too.

Rajiv Bajaj has made statements in the press which shows that he doesn’t look at EVs as positively as his looks at Petrol and CNG bike. He has stated that “there is no big party happening in the eScooter market in spite of the subsidies given”. 

So the petrol scooter companies will never make more than 20% of their vehicles as electric. This is because if they become a 100% Electric Vehicle manufacturing company then it will destroy their Petrol Scooter dealership ecosystem which gets regular income from parts replacement, oil change and servicing petrol scooters.

On the other hand in electric vehicles almost 90% do not need to visit dealership for service.

So the future looks to be a duopoly – Ola Electric and Ather Energy just like in Mobile Phones services we have Jio and Airtel. Similarly in electric vehicles there is a good chance that in 2 years’ time as the market matures, only the Pure Electric Vehicle manufacturers will be able to survive.

ATHER AND OLA ARE THE ONLY 2 HIGH END and “ONLY-ELECTRIC VEHICLE-COMPANY” IN EV MARKET in the top 10 seller list.

COMPANY	FUEL SUPPORTED
OLA ELECTRIC	Pure EV maker
TVS	Petrol, FlexFuel & EV Maker
BAJAJ	Petrol, FlexFuel, CNG & EV Maker
ATHER ENERGY	Pure EV maker

Bajaj in spite of sitting on huge cash pile will be spreading itself too thin investing in multiple fuel vehicles. Bajaj will also find itself vulnerable in electric rickshaws where also it will face competition from Ola Energy.

In spite of such servere competition the demand for electric scooters is so strong that there are many other smaller escooter makers like Ampere, Okaya, Bgauss, BattRe, YoBikes, Joy Electric, Okinawa, Hero Electric, Benling, etc in the market experiencing good sales.

Covid-19 and the onset of subsidy removal (years 2020-2023) kind of slowed down the electric scooter market. The cost of petrol keeps growing with time and there is no doubt that anywhere in India if a person has a charging point he will buy an electric 2 wheeler.

 The IPO Journey

Ather Energy is set to file its Draft Red Herring Prospectus (DRHP) for an IPO, aiming to raise approximately ₹4,500 crore (around $550 million) at a valuation of $2.5 billion.

The IPO will consist of a fresh issue of shares and an offer for sale by existing shareholders.

The funds raised will be utilized for:

• Capacity expansion,
• Research and development, and
• Strengthening the company’s distribution network.

The decision to go public comes at a time when the Indian EV market is witnessing rapid growth, driven by favorable government policies, increasing environmental awareness, and rising fuel prices. Ather’s IPO is expected to attract significant investor interest, given the company’s strong fundamentals and growth potential.

Impact on the EV Market

Ather Energy’s IPO is poised to be a landmark event in the Indian EV market. It will not only provide the company with the necessary capital to scale its operations but also set a precedent for other EV startups considering public listings. The successful listing of Ather Energy could boost investor confidence in the EV sector and accelerate the adoption of electric vehicles in India.

Moreover, the IPO will enhance Ather’s visibility and credibility, enabling it to forge strategic partnerships and collaborations. This, in turn, will drive innovation and growth in the EV ecosystem, benefiting consumers and the environment alike.

Ather Energy’s journey from a startup to a leading player in the electric two-wheeler market is a remarkable story of innovation, resilience, and vision. As the company prepares for its IPO, it stands at the cusp of a new era of growth and expansion.

The IPO will not only provide Ather with the financial resources to achieve its ambitious goals but also reinforce its position as a pioneer in the EV industry. With its commitment to sustainability and excellence, Ather Energy is well-positioned to lead the charge towards a greener and more sustainable future.

Pros:

1. Has top class R&D in electric scooters in the world.
2. Manufactures good quality vehicles
3. Excellent Customer Service
4. Variety of accessories
5. Different type of eScooters for different people – from Beautiful Family Scooter Rizta to the Apex Speed Monster.
6. Unlike Ola its a no-headache eScooter.
7. Slow but very steady scaling
8. Popular in South India… almost unheard in North India.
9. In 2023-2024 First time lots of Ather eScooters are visible on Mumbai Roads
10. With more than 10 yrs in R&D, scooter-data and sales it is the most tested eScooter in India.
11. eScooter has innovative features and accessories are innovative and really cool.

Cons:

1. Expensive Subscription
2. Very Very slow scaling up.
3. No electric Motorcycle yet in 10 yrs