Ather Energy, an innovative electric vehicle (EV) company founded by Tarun Mehta and Swapnil Jain, has a unique story that captures the essence of Indian entrepreneurship. This case study delves into Ather’s journey, from its inception to its struggles and eventual rise,
Thank you for reading this post, don't forget to subscribe!| Main Key Points | Details |
| Founders | Tarun Mehta and Swapnil Jain |
| First Product | ‘Famp’ fan, a project to convert thermal energy from oil lamps to power fans |
| Initial Challenges | Market acceptance and funding |
| Key Milestones | First prototype built in 4 months; crowdfunding success – Investment from Srinivas Shasan and Hero MotoCorp |
| Production Challenges | Vendor adaptation and cost management |
| Marketing Oversight | Competitors’ aggressive marketing strategies outpaced Ather |
| Future Strategy | Focus on software, technology upgrades, and expanding product lines |
How Ather Started
In 2009, at IIT Madras, two engineering students, Tarun Mehta and Swapnil Jain, embarked on a mission to revolutionize the energy space. Their initial product was an ambitious fan called ‘Famp,’ which aimed to use thermal energy from oil lamps to power fans for remote Indian villages. Although this idea didn’t materialize, their passion remained undeterred.
During their last semester, Tarun discovered battery swapping, which convinced them that electric vehicles were the future. They initially aimed to manufacture lithium-ion batteries for EVs but soon realized that existing electric vehicles were underpowered, unreliable, and unappealing. This led them to a bold decision: instead of just making batteries, why not create an electric vehicle people would actually want to buy?
Big Step’s
In 2013, the journey to build India’s first smart electric scooter began. Back then, the market was flooded with low-quality electric scooters imported from China. These scooters were slow, unattractive, and struggled to climb flyovers. Tarun and Swapnil were inspired by Tesla and aimed to surpass petrol scooters in performance and design. This meant they had to build everything from scratch in India.
They started their project in the robotics lab of IIT Madras, tearing down an existing electric scooter to understand its components. It took four months to build their first prototype, and with a grant of 5 lakh rupees from IIT Madras, they made a second prototype. However, serious funding was needed to build a market-ready product.
The duo decided on a crowdfunding approach, taking pre-orders for 25 scooters at 85,000 rupees each. This strategy caught the attention of Srinivas Shasan, an IIT Madras alumnus, who invested 25 lakh rupees in the company. With this funding, this EV startup moved to their first office and started developing their next prototype.
In 2016, Ather announced their first electric scooter, the S340, aiming for commercial production by the end of the year. However, turning a functional prototype into a production-ready vehicle proved challenging. They needed numerous automotive vendors to produce parts that met their high standards, but these vendors were not ready to adapt to Ather’s requirements.
Negative 350% Gross Margins
Ather faced significant financial challenges. Producing an electric scooter from scratch in India was costly, and the company was on the brink of bankruptcy. Tarun approached investors with a promise to fix their pricing issue within a year, though he was unsure how. Consulting firms indicated that reducing costs by more than 30% was unprecedented in the automotive industry.
Decided to limit production to 2,000 scooters a month, despite having the capacity to produce 2,500, to control cash burn. They also leveraged resources from Hero MotoCorp, a strategic partner, to streamline their production processes. By early 2021, Ather managed to reduce costs below their selling price, achieving a significant milestone.
| Consulting Firms’ Insight | Cost reduction beyond 30% is unprecedented |
| Production Limitation | Limited production to 2,000 scooters/month |
| Factory Capacity | Capacity to produce 2,500 scooters/month |
| Leverage Hero MotoCorp Resources | Streamlined production with Hero MotoCorp’s resources |
| Cost Reduction Achievement | Reduced costs below selling price by early 2021 |
Bad Marketing
Despite having a superior product, Ather struggled with marketing. In 2019, Tarun Mehta emphasized product development and after-sales service as keys to success, neglecting marketing. As a result, this EV brand recognition lagged behind competitors like Ola Electric, which heavily invested in marketing. Ola received 88,000 bookings within 12 hours of launch, while Ather’s total sales over four years were significantly lower.
Tarun later admitted their marketing oversight. Ather’s focus on quality led to strong word-of-mouth recommendations, but this wasn’t enough to compete with the aggressive marketing strategies of rivals.
FAQ
Q: How to open Ather seat?
A: Find the seat lock next to the back of the scooter and turn the key to unlock the seat. After the seat is unlocked, gently raise it.
Q: How to remove Ather charger?
A: Press the release button on the charging connector and carefully remove the charger from the scooter’s charging port to make it disappear.
Q: What is Ather Pro Pack?
A: Press the release button on the charging connector and carefully remove the charger from the scooter’s charging port to make it disappear.
Q: How to restart Ather?
A: You can switch off the key, wait a short while, and then turn the scooter back on to restart it.
Q: How to get Ather dealership?
A: Visit the official website and complete the dealership inquiry form to apply for a dealership. After reviewing your application, a member of the team will get in touch.
Q: How to turn on Ather after shutdown?
A: After a shutdown, all you have to do is turn the key to the ON position and wait for the system to start in order to power on.
Q: How to remove charger from Ather?
A: Press the release button on the charging connector and carefully remove the charger from the charging port.
Q: How to buy Ather service subscription?
A: Visit the website or the app to purchase their service subscription, then choose the service package that best fits your requirements. To subscribe, simply follow the instructions.
Q: What is Warp Mode in Ather?
A: scooters’ high-performance Warp Mode offers the most power and acceleration possible for an exhilarating ride.
Q: How to check Ather battery health?
A: Use the app or the scooter’s dashboard to view battery status and health data to monitor the condition of your battery.
Q: What is Ather Connect Pro?
A: For an improved ownership experience, it is a premium connectivity service that provides features including ride statistics, over-the-air upgrades, and onboard navigation.
Strategy to Win
Despite the setbacks, Ather remains a strong contender in the EV market. Their commitment to quality has earned them a loyal customer base. Recent efforts to enhance their marketing and expand their product line, like the new family-friendly Ather 450X, show promise.
Ather is also betting on software and technology upgrades as future revenue streams. Tarun believes that selling software updates, accessories, and technology enhancements will be crucial for long-term success. Currently, 15% of Ather’s revenue comes from these sources, a figure expected to grow Read more…
