India Must Keep E-Scooter Subsidies to Boost Adoption, Ather CEO Says

E-scooters accounted for 5 percent of total two-wheeler sales in India in fiscal 2023-2024.

By Reuters | Updated: 8 April 2024 13:30 IST

India Must Keep E-Scooter Subsidies to Boost Adoption, Ather CEO Says

Photo Credit: Reuters

Government slashed cash incentives for e-scooters to a maximum of 15 percent of the purchase price

Highlights

Indian aims to electrify 70 percent of its two-wheeler fleet by 2030
Ather launched its 450 series of e-scooters in 2018
Ather has launched a new, "family-friendly" e-scooter called "Ritza"

India will need to keep subsidies for electric scooters for another few years to boost the switch from polluting motorbikes, the CEO of e-scooter maker Ather Energy told Reuters on Saturday.

Industry experts believe subsidies such as cash incentives are crucial to India hitting its goal of electrifying 70 percent of its two-wheeler fleet by 2030, as the world's third-largest importer of oil looks to reduce dependence on fossil fuels.

"We've been able to cut down a lot of subsidy reliance, but it's also come at the cost of almost a year's worth of lost growth," Ather CEO and co-founder Tarun Mehta said in an interview.

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Mehta was referring to the government's surprise decision in May to slash cash incentives for e-scooters to a maximum of 15 percent of the purchase price before tax from 40 percent previously.

India's e-scooter market is small but growing, accounting for 5 percent of total two-wheeler sales in fiscal 2023-2024. Ather was one of the first to drive the pick-up in adoption with the launch of its 450 series of e-scooters in 2018, but has fallen behind larger rivals Ola Electric and TVS Motor, whose discounts have driven sales.

Ather, which counts India's biggest two-wheeler maker Hero MotoCorp as its largest investor, launched a new, "family-friendly" e-scooter called "Rizta" on Saturday, priced at Rs. 109,999 ($1,321).

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The scooter has a larger seat and storage space compared with rivals. Mehta hopes it will attract a wider range of buyers in India's populous north and west regions, helping boost sales.

Loss-making Ather is focusing on top-line growth, Mehta said, but added margins would improve if sales volumes were higher.

"We haven't broken even yet, I think there's still a journey, hopefully it's not very long. Hopefully the Rizta plays a meaningful role because I am happy in how margins are shaping up at a unit level," he said, without giving details.

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