Indian electric scooter maker Ather Energy will speed up the domestic launch of new models and test export markets, raising new funds to boost growth after the government reduces subsidies for the vehicles, its chief executive told Reuters.

India’s e-scooter market is small but growing, with e-scooters accounting for 5% of total scooter and motorcycle sales last fiscal year, and the government aims to reach 70% by 2030.

But the government took unexpected action in May, slashing cash incentives on vehicles from the previous 40 per cent to 15 per cent of the pre-tax price without explanation. Total e-scooter sales fell by more than half the next month.

Ather’s sales have also declined but are recovering rapidly. Chief Executive Tarun Mehta said in an interview that the company is currently working on two new models, one of which will be launched six months earlier than originally planned.

“Without the (subsidy) changes, the transition to electric vehicles might have been faster, but even then it would not have had a significant impact in the medium to long term,” he said.

“This shift means we must fast-track product launches and invest more in product development,” he added.

As part of its long-term growth strategy, Ather aims to generate more than 50% of its sales from global markets by the end of the decade, Mehta said.

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

Ather, which is valued at about $750 million (nearly Rs 6,250 crore), will raise more funds by the end of 2023 to support its growth plans, he said, without giving further details.

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

Ather will also conduct pilot sales in an Asian export market within a few months.

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

© Thomson Reuters 2023

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