Ather is not interested in EVs priced under ₹1 lakh: CEO Tarun Mehta

IPO-bound electric vehicle startup Ather Energy is not interested in the sub-₹1 lakh scooter category as it isn't attractive from a margin perspective, according to the company’s co-founder and CEO Tarun Mehta.

“We are not interested in the sub-₹1 lakh category because we think there is going to be a lot of bloodbath there with no reward," Mehta said, adding that the customer in this category is not even ready to go electric.

Ather’s cheapest scooter, the Rizta, is priced starting from ₹1.1 lakh (ex-showroom Delhi).

Bhavish Aggarwal’s Ola Electric was the first to enter the sub-₹1 lakh e-scooter category. Legacy automakers followed by selling products at a lower price point in order to win market share. Today, Ather is India’s fourth-largest electric two-wheeler maker after Bajaj Auto, Ola Electric, and TVS Motor Company.

Ather is the only large brand that has not given into the temptation of sub-₹1 lakh products, said Mehta. “We have not needed to discount. Everybody’s ASPs (average selling prices) have trended downwards, only Ather has been able to maintain ASPs,” he said.

“We have been pretty vocal that we won’t go below ₹1 lakh price point. That’s not where the future lies. The future is 125cc (ICE equivalent) products and not 110cc. The 125cc segment has grown from 20% to 47% in the last five years. We don’t need to go after the dying segment,” said Mehta.

The Ather CEO believes electric vehicles should be able to command some premium over petrol-powered variants. “Given the fact that electric comes with battery and there is a fundamental cost that’s added there, our industry should look at ways for justifying that cost with a 10-15% premium,” Mehta said, adding that even petrol customers buy more than ₹1 lakh scooters.

“Our industry needs good products marketed by all and not crappy discounted products sold at throwaway prices,” said Mehta.

Ather's portfolio includes two products: the performance scooter 450 and the family scooter Rizta. Launched last year, Rizta is now driving the majority of sales for Ather as the company expands its network to northern and western parts of the country where it had a limited presence earlier.

The startup is also developing a new ‘EL’ platform for its upcoming mass-market scooters.

The strength of legacy players comes from their wide distribution network, according to Mehta. "It is something we can catch up on," he said. However, Ather has no plans to use its largest shareholder, Hero MotoCorp's distribution network. While Hero has a big presence on Ather's board and cap table with its 37.2% stake, there are very few synergies between the companies apart from charging infrastructure. Ather's customers can use Hero Vida’s fast chargers and vice versa.