Ather Energy is following the Tesla model of innovation, design & customer engagement, while also making electric mobility aspirational for the masses. We sit down with the company’s co-founder & CEO, Tarun Mehta, to find out more about this EV start-up.
How did Ather Energy start?
Back in 2013, we were looking at the EV space quite closely, and we're trying to figure out if we could make battery packs for this market. But the more customers we met, the more we realised that there’s a gap – not in terms of technology but in terms of product.
There were only a few companies that made electric scooters for our market back then, but they weren’t making anything completely from the ground-up. Instead, they imported parts from China and assembled them here. We took this as an opportunity, as we believed that our market is lacking a decent product.
But, as a new brand, we also realised that we need to differentiate ourselves from others – we wanted a product that would stand out. And just building an electric scooter with superior performance wouldn’t have been enough. So, the new thing that we brought to the table was the ‘connected’ angle. It was a fairly secular global trend – connectivity costs were going down, the electronics were getting cheaper – so it was only a matter of time before all vehicles, including two-wheelers, would become ‘smart’ products. However, the advantage we had was that we were starting afresh. The addition of connected technology wasn’t a last-minute retrofit job – instead, each component of our scooter was in sync with the connectivity features. So, I feel that’s what gives us an edge over the others.
What were the major challenges that you faced?
From the very start, we focussed on the localisation of parts – we wanted to do everything in-house. And that’s why we have the largest R&D department for an electric vehicle company in the country, with a workforce of over 300 people. The batteries, battery management system, chargers, and even vehicle architecture, everything was done in-house. The problem of doing all this in India is that very few Indian companies evolve like this, from an engineering or a product perspective. So, hiring people who had the necessary engineering or designing experience was a very hard task. So, I’d say building the team was the biggest challenge. Obviously, raising funds for such a project was hard, too, but I’d say fund-raising is always hard, irrespective of the segment.
You launched two scooters – the Ather 340 and Ather 450 – but the former, which was more affordable, has been discontinued now. Why is that?
Actually, it’s quite interesting. The Ather 450 was an experiment, and the 340 was supposed to be the main product – given its more affordable price-tag. However, when we started taking pre-orders, the numbers startled us. Over 80-85% of the bookings were for the 450! Over the past year, the numbers have gone even higher, as 99% of the orders are for the 450. And this is why you don’t see the 340 on sale now. We’ve discontinued it because there was virtually no demand for it.
Ather markets the 450 as a ‘connected scooter’ and not an electric scooter. What’s the rationale behind this?
Most customers don’t buy an electric scooter, they simply buy a scooter. And they buy it if it’s a great product! There will always be a set of customers who want to buy electric, but, for them, they’ve already heard about Ather. But, for a lot of other people, they might have reservations about electric scooters, so, for them, you have to play on the front foot and convince them that we have a very exciting and superior product that’s loaded with cutting-edge connectivity and tech features. The fact that it happens to be an electric scooter is simply an added bonus. So, it’s a post-purchase rationalisation instead of the leading cause of sales.
The difference between a conventional petrol-powered 125cc scooter and Ather 450 is around Rs 30,000. Don’t you think that might deter buyers from going electric?
First of all, you have to convince the buyer that it’s a far superior product, justifying the premium. Secondly, the amount of money that you save on petrol monthly is so substantial that it plugs the price gap in less than two years. A typical customer, riding 8,000 – 9,000 kilometres annually, will spend around `17,000 on fuel. But, with Ather, you only pay around `2,000 for that kind of running – meaning you save nearly `15,000 yearly. Every year after that is pure saving, and you have to understand that it’s a superior product in every way. And customers these days know this, it’s easy math. To help them further, we offer financing and leasing options, which make owing an Ather even easier. Electric vehicles have a higher upfront cost, but a much, much lower monthly outflow.
Ather is making electric mobility aspirational for buyers! Is there any inspiration from Tesla?
I think what Tesla did makes a lot of sense. And I think any new technology goes through a very similar cycle. You start at the top of the pyramid, and you work your way down – taking advantage of economies of scale. That’s not unique about Tesla or Ather, that’s what happens when you launch something new, as the price is higher. Hence, if you’re selling something expensive, you better make it a very aspirational and exciting product to the end-user. What you don’t want to do is sell the technology when it’s expensive as a cheap solution – it’s bad marketing. So, if it’s expensive, you have to embrace it and make a kickass product, and give customers a reason to buy it. And that’s what we’re trying with our brand.
Like Tesla, you sell your products from company-owned outlets and not through dealer partners, why is that?
Today, we don’t need a dealer. Two-thirds of our orders come through online bookings, so the dealership model doesn’t work for us. Also, as a young company, running our own experience centres gives us a better connection with our customers. Any feedback from them rolls back directly to Ather pretty fast, whereas in the case of a dealer there’ll be long delays, as a customer has to go through multiple layers to be heard.
How do you manage after-sales though?
We do it ourselves! You can raise a request through a mobile app, and we’ll come to you at your doorstep. You don’t need to come to us!
Ather is only present in Bengaluru and Chennai at the moment, how soon can we see your products in other parts of the country?
We’re going in a controlled fashion. This is phase 1 for us – it was always about limited production, learning a lot from the customers, fixing bugs, and fixing our cost structures. In Phase 2, which is 2020, the production will start ramping up, and we’ll open more outlets in other major cities.
What’s Ather’s monthly production capacity?
Sorry, I can’t disclose that right now, but, annually, we’ll be at about 20,000 to 25,000 units by early 2020.
And are you also planning to open a new production plant?
Yes, that’s being planned. We’re going to expand operations to around 10 more cities in 2020. So, the current production of 20,000 to 25,000 units won’t be enough. We’ll announce it soon, once everything is finalised.
Any new products lined up for the near future?
Not really. But we’re working on more concepts and variants of the Ather 450 itself, and we’ll see if we can bring something to market by the end of next year. Also, we’ll only focus on the scooter market for the next 3 – 4 years.
Also read - Ather 450 Review