The company has so far raised about $100 million (Rs 714 crore) through equity with Hero MotoCorp being its largest investor with a 31% stake. It has also raised an additional $20 million through debt.
"(As a startup) you stop money raising money when you become profitable and it's going to be some time before that happens,” said Tarun Mehta, co-founder and chief executive of Ather Energy. “I think we'll go out and raise money once the 450X is out on the road (in July). Till then we'll wait.”
Mehta aims for Ather to be ebit-positive (earnings before interest and tax) in the next couple of years.
The company recently announced its updated product 450X, which will be up for sale from July this year and have a substantial price increase over the outgoing model. The new price will ensure that the product is contribution margin positive, Mehta said, adding that the company was losing money when selling it at Rs 1.13 lakh.
The 450X will be sold in two variants priced at Rs 1.49 lakh and Rs 1.59 lakh on-road, inclusive of government subsidies.
The company currently has sales operations in Bengaluru and Chennai and recently announced its plan to enter 4 new cities by July this year. Further, it plans to have presence in 10 cities by end of this year, and 24 by end of the next year.
Funds raised in the future will be utilised mainly for this operations expansion, unlike in the past when research and development accounted for a lion’s share of the capital expenditure, Mehta said.
To support the increased demand, the company is moving its manufacturing operations from Bengaluru to a larger plant in Hosur, Tamil Nadu. The new plant will have a capacity to make 100,000 units in two shifts at the beginning and it could be ramped up to half a million units as demand rises, according to Mehta.
Aiding confidence to his plans is the fact that Ather 450X has received more pre-orders so far than the total sales of the 450 in 2019.
2 Comments on this Story
Shankar Raman M J344 days ago
Have been owning an ather for 3 months - no issues - great prodxut probably the best EV around
Vemula Prajwal345 days ago
I've an ather recently purchased. Within three months there were repeated problems with the motor which company is unable to resolve. There were 5 instances of same error within three months. They should concentrate more on quality and issues. It's wise to see other electric scooter options currently in the market rather than ather.