Tarun Mehta, the CEO and co-founder of e-scooter maker Ather Energy, said India will need to continue subsidizing electric scooters for a few more years to accelerate the transition from polluting motorcycles.
Mehta told Reuters in an interview, “We were able to cut a lot of subsidy dependency, but it also came at the cost of almost a year of lost growth.” He was referring to the government’s surprise decision in May 2023 to reduce cash incentives for e-scooters to a maximum of 15% of the purchase price before tax from 40% previously, according to Reuters.
Industry experts believe subsidies, such as cash incentives, are crucial for India to meet its goal of electrifying 70% of its two-wheeler fleet by 2030, as the world’s third-largest oil importer seeks to reduce dependence on fossil fuels.
Ather was one of the first companies to drive the pickup in adoption with the launch of its 450 series of e-scooters in 2018. However, the company lagged behind larger rivals Ola Electric and TVS Motor, whose discounts drove sales, the report said. said
Ather, which counts India’s largest two-wheeler maker Hero MotoCorp as its biggest investor, launched a new “family” e-scooter called “Rizta” on Saturday, priced at 109,999 rupees ($1,321). Mehta hopes the scooter’s larger seating and storage space will attract a wider range of buyers in India’s populous northern and western regions, helping boost sales.
While Ather is focused on top line, Mehta acknowledged that the company has not yet broken even. He stated, “Hopefully, the Rizta plays a meaningful role because I am happy with how margins are shaping up at unit level,” without providing further details.
The Indian e-scooter market is small but growing, accounting for 5% of total two-wheeler sales in fiscal 2023-2024. The Ather CEO’s comments underscore the need for continued government support to drive the adoption of electric vehicles in the country.
(With Inputs from Reuters)
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Published: 08 Apr 2024, 10:10 IST