On 6 September, the Minister of Road Transport and Highways jolted the Indian automotive industry with his statement, “We will bulldoze the IC engine vehicles” and asked to adopt electric vehicles by 2030. With this many automakers welcomed the move, while others felt the move is ambitious and challenging. In this hullabaloo, many stakeholders weren’t clear about how the electric vehicle would be implemented because of no ecosystem.
While there were multi-million dollars fearing the implementation of electric vehicles because of lack of technology and customers. At the same time, a Bengaluru-based startup was working patiently for past three years in developing an electric scooter without of being thinking, where the scooter will be charged, where they will source vendors for its scooter, who will be the customers, and where it will be sold.
The company, founded in October 2013 by Tarun Mehta and Swapnil Jain from IIT Madras, has been working to build electric scooter Ather S340.
Interestingly, the co-founders earlier wanted to try their hands in the energy domain, but cash crunch took the idea to the back seat. The startup company, which is backed by Hero Corp, Founders of Flipkart and Tiger Global, is hoping to come out with its electric scooter by mid-next year.
In October 2016, it raised an investment of Rs 205 crore, with an immediate tranche of Rs 180 crore, On 02 November 2017, Hero Motocorp invested the final Rs 20.5 cr, as part of its total commitment for 26-30 per cent of the stake in the company.
This funding marks the third round of investment in Ather Energy. In May 2015, the startup raised Rs 75.33 crore from Tiger Global for the development, testing, production and launch of its first smart electric two-wheeler – the Ather S340. And earlier, in 2014, Flipkart founders Sachin and Binny Bansal had extended a funding of $1 million to the startup.
The First Kick
After graduation, Mehta filed a patent of a swappable backup for an electric vehicle. It took 6-7 months in evaluating and understanding the electric vehicle market, technology, and players. “Sooner we realised that the good product don’t exist because building it requires a lot of technology, which is hard because most of the Indian companies are not product companies, they are fundamentally distributors. So we decided to lead with manufacturing our electric vehicles,” affirmed Tarun Mehta, Co-Founder, Ather Energy.
Starting up a new business isn’t tough in the present time when startups are talk of the town. However, it takes guts for an entrepreneur to think about a business, which is primarily dominated by big players in the industry. But this thought did not let Mehta and Jain down to follow their dream.
Rather, the challenge became the opportunity for the young entrepreneurs.
“In India, there are 4-5 big players in the auto sector, but nobody was aggressively doing in the EV space. We don’t have proper electric scooter on road. People will definitely pay if an electric scooter is worth but you need to spec them right. So, we decided to cash in on the opportunity by innovating a complete new platform,” added Mehta.
Building An Ecosystem
To take the idea to the next level, the startup planned to build its own ecosystem to cater to the company’s needs. According to Mehta, any industry at the start is vertically integrated, so it seems hard but companies will have to build their own ecosystem.
He added, “Initially, you will have to be your own vendor. You will have to make your own battery pack, charger, dashboard, controller, platform, a lot more thing by yourself. And we managed do a couple of things. We have created platforms for sub systems, which OEMs don’t have.”
The company roped in biggies to build a perfect team. Ather Energy appointed former Royal Enfield CEO Venkatesh Padmanabhan as its Chief Operating Officer to head supply chain, quality, manufacturing, and service delivery. The Bangalore-based electric two-wheeler startup also hired Thiruppathy Srinivasan as its new Vice-President of Vehicle Development.
The Ather S340 will have a driving range of 60 kms with a top speed of 72 KPH. The lithium-ion battery pack offers a lifecycle of 50,000 kms or a lifespan of 5-6 years. It can do a 0-60 kmph spring in 12.11s. Max torque output stands at 14 Nm. The S340 makes use of an electrically powered motor and a battery pack to power the scooter forward and backwards.
The battery can be charged through any 15A socket and will give a dash charge of 80 per cent within 50 minutes and a full charge under 1.5 hours.
Weighing in at 90 kilograms, the S340 smart scooter has been designed in-house, and every component is custom designed by the company, including the rim and the side-stand. These components needed to be redesigned to be as lightweight as possible. The battery pack is assembled in-house and cells are imported.
The electric two-wheeler market is booming at 38,000-40,000 units per annum, but it is doubling year on year. The sales are expected to hit half a million in the next five years, according to the industry sources.
Admitting the mistakes last February, Ather Energy unveiled its electric scooter S340 and anticipated to launch this year. But things did not go as per the plan. On this Mehta commented, “We were not smart enough, we didn’t know the full process. So, in February last year, we unveiled the scooter. Initially, we though it will take 4-5 months to the point. Some functionalities were missing at that time, but by June- July they were all in.
The company will commercially launch its electric scooter mid-2018, confirmed the Co-Founder. The company has planned an investment of $10 million in its manufacturing facility.
The price of the vehicle is expected to fall between Rs 80,000-100,000. The scooter will use lithium-ion batteries.
It is in talks with owners of malls, offices and tech parks, restaurants, grocery stores and residential complexes to put up charging stations. Although, the company has other legal hurdles to cross before it can move ahead with its plans of setting up a charging infrastructure.
Identifying the Customer
With the $10-million investment, Ather Energy is eyeing to expand capacity of 20,000 units annually. On the other hand, Mehta targets are modest, as he is targeting to sell only 10,000 units in the first year of its commercial launch. He believes phase one will be the biggest challenge, as he wants the customers to be on his side by getting a right product feedback. He really want to hand pick the customers and at the same time make sure to have a strong communication channel with them, so that enough feedback comes back to the company.
“We have seen men and women equally excited about the product. The real thing is to be technologically advance that is what we are considering in phase 1. In phase two, the story will be different. Our target is not to build smart vehicles, our vision is all vehicles are going to be electric in future,” Mehta added.
Setting up the right channel
Unlike traditional players, Ather Energy will not have dealerships and service centre. The company plans to go other way round. It plans to sell it online with few experience centres. In the first go, the company will start selling in three cities — Bangalore, Pune and Chennai.
“Since we can’t match the touch points like Hero, or Honda offers. So we are planning the other way round. Instead of having touch points, we will be providing on-road support 24X7,” he added.
Currently, Ather Energy is not concerned about the competition from other automotive manufacturers, but welcomes more players to drive an ecosystem of electric vehicles, which would only improve a case for installing charging infrastructure for them.
Source: ET Auto