Startup Originals Team
Ather Energy is seeing demand for its electric scooters outpace its current production capacity, with monthly pre-orders crossing 50,000 units as the company works to expand manufacturing.
The electric two-wheeler maker retailed around 30,000 units per month during the first quarter, meaning a significant portion of potential demand could not be fulfilled because of supply constraints.
Ather estimates that it could have sold another 13,000-15,000 scooters each month if sufficient inventory had been available. The company is now accelerating capacity expansion, preparing a lower-priced scooter and raising fresh capital to support its next phase of growth.
What Happened?
Ather said it is currently receiving more than 50,000 pre-orders every month, significantly above the roughly 30,000 scooters it retailed monthly in the first quarter.
The mismatch has created longer waiting periods for customers. Dealer inventory has declined from around 14 days to only three days, while existing stores are currently able to fulfil just 50-60% of demand.
Some dealers have stopped accepting new bookings altogether as waiting periods have extended to two months or longer.
The company currently has annual production capacity of approximately 4.2 lakh electric scooters. Its Hosur facility alone can produce around 35,000 scooters a month.
Key Details
Ather expects the first phase of its AURIC manufacturing facility to increase its total annual production capacity to around 9.2 lakh units later this calendar year.
The company is also evaluating a second phase of the AURIC facility. If approved and completed, the expansion could add another 5 lakh units of annual capacity, taking Ather’s overall capacity to approximately 14.2 lakh scooters a year.
However, the company has not yet started investments in the second phase. Management expects to provide greater clarity on the expansion during the next one or two quarters.
The supply expansion is particularly important because current retail capacity is significantly below the level of monthly pre-orders being generated.
Fresh Capital To Support Expansion
Ather recently completed a ₹1,300 crore qualified institutional placement (QIP) to strengthen its financial position and support its growth plans.
The company is also seeking shareholder approval for another ₹1,200 crore preference issue. Together, the planned fundraising could bring in approximately ₹2,500 crore.
The funds are expected to support manufacturing capacity expansion at Ather and its suppliers, upcoming product launches and the company’s balance sheet as it manages commodity and supply-related pressures.
The fundraising comes as Ather prepares to increase production to meet growing demand while investing in new products.
New Lower-Priced Scooter To Drive Growth
Ather’s upcoming lower-priced EL scooter is expected to become another important driver of production expansion.
The company plans to build capacity for approximately 60,000 EL units per month across its Hosur and AURIC facilities.
The scooter is initially expected to have a stronger focus on northern and central parts of India, where Ather sees demand for more affordable electric scooter options.
The new product could allow the company to address a broader customer segment while using its expanded manufacturing infrastructure.
Company Background
Ather Energy is an Indian electric two-wheeler manufacturer focused on electric scooters and related charging infrastructure.
The company has been expanding its manufacturing footprint as demand for electric two-wheelers grows. Its existing production operations are centred around its Hosur facility, while the AURIC expansion is expected to significantly increase its overall manufacturing capacity.
The company’s current situation reflects a shift from generating demand to ensuring that its manufacturing and retail network can keep pace with customer interest.
Industry Impact
Ather’s demand-supply gap highlights the growing challenge for electric two-wheeler manufacturers as consumer adoption increases.
For Ather, higher production capacity could translate into greater sales if the company can reduce waiting periods and improve vehicle availability across its retail network.
The planned lower-priced EL scooter could also broaden the company’s addressable market, particularly in regions where consumers remain more price-sensitive.
At the same time, expanding manufacturing capacity and supplier output will require significant capital. Ather’s planned ₹2,500 crore fundraising programme therefore becomes important for supporting production growth without putting excessive pressure on its balance sheet.
Future Plans
Ather’s immediate priorities include ramping up the first phase of its AURIC facility, expanding supplier capacity and preparing production for the upcoming EL scooter.
The company is also evaluating the second phase of AURIC, which could take its annual production capacity to around 14.2 lakh units.
Management is expected to provide more clarity on the second phase over the next one or two quarters.
Conclusion
Ather Energy’s monthly pre-orders crossing 50,000 units show that demand for its electric scooters is currently running well ahead of available supply.
With dealers holding only around three days of inventory and some customers facing waiting periods of two months or more, expanding production has become a key priority.
The company’s ₹2,500 crore planned fundraising, AURIC expansion and upcoming lower-priced EL scooter could help Ather close the gap between demand and capacity and prepare for its next stage of growth.
