Tag: e scooter

Ather Energy to Accelerate New Launches in India and Foreign Markets

Indian electric scooter maker Ather Energy will accelerate new model launches at home and test export markets, its chief executive told Reuters, raising new money to boost growth after the government lowered subsidies for the vehicles.

India’s electric scooter market is small but growing, with e-models accounting for 5 percent of total scooter and motorcycle sales in the last fiscal year against a government target of 70 percent by 2030.

But in a surprise move in May, the government, without explanation, slashed cash incentives on the vehicles to a maximum of 15 percent of the price before taxes from 40 percent earlier. The next month total e-scooter sales more than halved.

Ather’s sales also dropped but are rapidly picking up. CEO Tarun Mehta said in an interview that the company is now working on two new models, one of which will be launched six months earlier than originally planned.

“The transition to electric vehicles could have been faster if not for the (subsidy) change but even then, there will be no major impact in the mid to long term,” he said.

“This shift means we are having to fast track product launches and invest more in product development,” he added.

As part of a long-term growth strategy, Ather is aiming for more than 50 percent of its sales to come from global markets by the end of the century, Mehta said. 

Ather, India’s third-largest e-scooter maker after Softbank Group-backed Ola Electric and local TVS Motor, plans to add a scooter designed for use by different members of a family to its current two-model lineup aimed at individual riders, Mehta said. 

Valued at around $750 million (nearly Rs. 6,250 crore), Ather will raise more money before the end of 2023 to back its growth plans, he said, without giving more details.

A source with direct knowledge of Ather’s plans said the company is looking to raise an amount similar to the $108 million (nearly Rs. 900 crore) garnered from existing shareholders Hero MotoCorp and Singapore’s sovereign wealth fund GIC in a recent rights issue. 

Ather will also pilot sales in one Asian export market in a couple of months.

“India will not only be the largest market in the world for electric two-wheelers but also the largest exporter,” he said.

© Thomson Reuters 2023

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Ola Electric Expects to Quadruple Revenue This Financial Year, Reveal Company Documents

Indian e-scooter maker Ola Electric expects revenue to quadruple to $1.5 billion (nearly Rs. 12,300 crore) this financial year and then double that again in two years, according to a document containing corporate projections and people briefed on the matter.

The figures, however, pre-date surprise cuts by the federal government to e-scooter incentives in May. 

According to the document, which was prepared ahead of investor meetings for Ola’s planned IPO worth up to $700 million (nearly Rs. 5,700 crore) and was reviewed by Reuters, the company is also targeting $220 million (nearly Rs. 1,800 crore) in operating profit for the year to end-March.

The $1.5 billion revenue target compares with a result of $335 million (nearly Rs. 2,750 crore) for the past financial year, two people briefed on the matter said, adding that there had been no change to Ola’s internal estimates since the document was drawn up in April.

Ola, which is backed by Japan’s SoftBank Group and Singapore’s Temasek, did not respond to repeated requests from Reuters for comment.

Since it began sales in late 2021, Ola has become India’s e-scooter market leader with a 32 percent share, competing with Ather Energy as well as companies like TVS Motor and Hero Electric. It was valued at $5 billion (nearly Rs. 41,000 crore) last year and has raised nearly $800 million (nearly Rs. 6,650 crore) from investors since 2019.

Incentives slashed

The Indian government has said it wants electric variants to account for 70 percent of two-wheeler sales — which also include motorcycles — by 2030, a huge jump from 14 percent currently.

But in May, it shocked the market by slashing e-scooter cash incentives without explanation, saying it would pay just up to 15 percent of the price before taxes. It had earlier pledged to pay up to 40 percent.

In June, industry-wide Indian sales of e-scooters more than halved from May to a six-month low of 45,800 units, government data showed.

“The subsidy cut poses a roadblock for all (e-scooter) companies’ growth because prices for the consumer have increased. Revised projections have to be applied, which will also hit valuations,” said Jay Kale, a vice president at Elara Capital.

But in an interview last week with India’s Business Standard, Ola CEO Bhavish Aggarwal said he was not fazed by the subsidy cut and said last month’s slide in industry-wide sales was just a “short-term blip”.

“The current subsidy after reduction is the right amount”, Aggarwal was quoted as saying, adding that the company could “live without” such incentives.

According to the document seen by Reuters, Ola has estimated it will sell 8,82,000 scooters this financial year and 2.9 million in two years time.

In contrast, KPMG in a June report forecast this financial year’s e-scooter demand at just 1 million units, a third lower than previously estimated. It predicts industry-wide sales of just 2 million in two years time.

For the quarter just ended, Ola sold 68,316 e-scooters, industry data shows. That’s 17 percent below the 82,000 estimate in the document seen by Reuters.

The document shows Ola aiming for revenue of $3.9 billion (nearly Rs. 32,000 crore) and operating profit of $578 million (nearly Rs. 4,700 crore) in two years.

For its IPO, Ola is working with Goldman Sachs and Bank of America among others, and has started early meetings with investors to brief them on the company’s plans.

© Thomson Reuters 2023

Will the Nothing Phone 2 serve as the successor to the Phone 1, or will the two co-exist? We discuss the company’s recently launched handset and more on the latest episode of Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

 

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Nitin Gadkari Urges Advance Action Over EV Fire Incidents, Shares Concerns Over Rising Temperature on EV Batteries

Amid incidents of electric two-wheelers catching fire, Union Minister Nitin Gadkari on Tuesday urged companies to take advance action to recall all defective vehicles, even as he said there is some problem with EV batteries when the temperature rises in the months of March, April and May. The Road Transport and Highways Minister also acknowledged that the country’s EV industry has “just started” and emphasised that the government does not want to put up a hurdle.

“But safety is the highest priority for the government and there can be no compromise with human lives,” Gadkari said at the Raisina Dialogue.

His comments assume significance against the backdrop of multiple incidents of Electric Vehicles (EVs) catching fire and resulting in deaths and severe injuries to people.

During an interactive session, Gadkari reiterated that companies may take advance action to recall all defective batches of vehicles immediately.

“In March-April-May, the temperature rises, then there is some problem with the battery (of EVs). I feel that it (electric two-wheelers catching fire) is a problem of (high) temperature,” he said.

The road transport and highways minister noted that the government wants to make EVs popular.

“We understand that the EV industry has just started. We don’t want to put a hurdle. But safety is the highest priority for the government and there can be no compromise with human lives,” Gadkari asserted.

Last week, Gadkari, who is known for his frank views, had said that the companies found negligent will be penalised and a recall of all defective vehicles will be ordered after receiving the report of an expert panel that has been formed to enquire into the matter.

The government had ordered a probe last month after an e-scooter launched by ride-hailing operator Ola’s electric mobility arm caught fire in Pune.

The Centre for Fire Explosive and Environment Safety (CFEES) had been asked to probe the circumstances that led to the incident and also suggest remedial measures, according to the road transport ministry. The ministry had also asked CFEES to share the findings along with its suggestions on measures to prevent such incidents

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