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Ather Energy: The Road to Electrifying India

Ather’s rise from an IIT Madras lab to an EV leader – a story of persistence, innovation, and smart growth

For years, Indians have debated the merits of Activa versus Access, weighing factors like fuel efficiency and resale value. But in recent years, the conversation has completely shifted—from kilometers per liter to kilometers per charge. The Indian two-wheeler EV market is now booming, and leading the charge since 2013 is a homegrown player: Ather Energy.

Ather is no ordinary startup. It’s a company that has spent years carefully building and shaping the electric vehicle ecosystem in India. From designing cutting-edge electric scooters to building a robust charging network, Ather has been at the forefront of the EV revolution in the country. By taking a meticulous and long-term approach, the company has not only focused on creating a reliable and innovative product but also on fostering the entire infrastructure required to make electric mobility a mainstream option in India.

So, what’s Ather’s story? How did it grow to where it is right now? And what different approach did it take? This case study answers all those questions. So let’s dive in!

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The Beginning: A College Project Turned Startup

In 2013, two IIT Madras graduates, Tarun Mehta and Swapnil Jain, embarked on a journey that many deemed impossible—building an electric vehicle (EV) startup in India from the ground up. The duo identified a critical gap in India’s EV market: while electric vehicles existed, they were plagued by a lack of innovation, poor performance, and minimal consumer appeal. The vision they had in mind was ambitious yet clear—to create a smart, connected, and high-performance electric scooter designed specifically for Indian roads.

At a time when the Indian two-wheeler market was dominated by petrol-powered bikes, and skepticism around EVs was at its peak, Ather Energy boldly took the plunge, betting on clean mobility as the future of transportation in India. What began as a research project at IIT Madras slowly turned into a mission to disrupt the traditional two-wheeler industry and redefine how India approached electric vehicles.

The Early Days: Betting on Innovation

  • The Beginnings: In 2009, Tarun and Swapnil initially aimed to create a product that harnessed thermal energy from oil lamps to power fans in remote villages with limited electricity. While the idea didn’t materialize, it sparked their passion for energy solutions. During their final semester, Tarun discovered battery swapping technology and realized that electric vehicles (EVs) could be the future. He believed that the success of EVs hinged on solving the issue of charging infrastructure. This led them to consider creating a battery company for EVs.

  • Market Research and Realization: Through extensive market research, Tarun and Swapnil found that most EV owners were dissatisfied with the underpowered and unreliable scooters available at the time. This insight prompted a pivot from batteries to building a high-performance electric scooter, and they focused on creating a brand around it, laying the foundation for Ather Energy.

  • Development Phase: Ather's team began prototyping their first scooter by disassembling existing models in the robotics lab at IIT Madras. After four months, they completed their first prototype. With initial funding of ₹5 lakh from IIT Madras, they faced financial challenges. To raise additional capital, they took pre-orders for 25 scooters at ₹85,000 each, attracting an investment of ₹25 lakh from entrepreneur Seren V Shasan.

  • Product Launch and Challenges: In 2016, Ather announced its first scooter, the S340, with plans to begin production by the end of the year. However, sourcing high-quality components from Indian automotive vendors posed a challenge. To overcome production hurdles, Ather secured an investment from Hero MotoCorp, which provided both funding and access to established supply chains. This partnership enabled them to set up a production facility in Bengaluru

  • .Successful Launch: In 2018, Ather finally launched the Ather 340 and 450 scooters, equipped with cutting-edge features like a touchscreen dashboard and Google Maps integration. The Ather 450 quickly became known for being the fastest accelerating scooter in India at the time.

The Product: A Smart Scooter for a New India

After years of struggle, the company launched their flagship product, the Ather 450, in 2018. It wasn’t just about having an electric drivetrain; the Ather 450 was packed with revolutionary features that were unheard of in the two-wheeler market at the time. The scooter came equipped with a high-tech touchscreen dashboard, built-in navigation, over-the-air (OTA) software updates, and smart connectivity features that allowed users to monitor vehicle performance, battery health, and more through a dedicated mobile app. This level of sophistication marked a paradigm shift in how consumers viewed electric vehicles.

The response from consumers was nothing short of overwhelming. Despite its premium price tag of ₹1.13 lakh, the Ather 450 quickly gained a loyal following. Early adopters were drawn not only to the scooter's cutting-edge technology but also to its performance, which included faster acceleration and superior handling compared to traditional petrol scooters. This made the Ather 450 appealing not just for its environmental benefits but for its sheer quality and driving experience. By 2019, Ather had already begun expanding its reach, launching operations in key urban markets like Bengaluru and Chennai. To complement the scooters, the company set up its own charging infrastructure, Ather Grid, which included 30 fast-charging points across both cities. This move was a critical part of Ather's strategy to ease consumer concerns about charging availability, further solidifying its commitment to providing a seamless EV experience.

The Ather 450 wasn’t just a product; it was a statement that Ather Energy was setting a new benchmark in the electric vehicle market—combining innovative design, technology, and performance in a way that had never been seen before in India.

The funding and Financial journey

  • Initial Funding and Early Investments:

    1. Seed Funding: As mentioned above, in 2014, Ather Energy received ₹4.5 million ($53,000) from the Technology Development Board under the Department of Science and Technology, helping to kickstart the development of their electric scooters.

    2. Crowdfunding Strategy: To raise more capital, Ather used a crowdfunding approach by pre-selling 25 scooters at ₹85,000 each. This caught the attention of investors, including Seren V Shasan, who invested ₹2.5 million ($30,000) in 2015.

    3. Flipkart Founders’ Investment: In December 2014, Flipkart founders Sachin and Binny Bansal invested $1 million, fueling further product development.

  • Strategic Partnerships and Major Investments:

    1. Hero MotoCorp Investment: In October 2016, Hero MotoCorp invested ₹205 crore ($30 million) in Ather, acquiring a significant stake and providing both financial support and access to Hero’s automotive supply chain.

    2. Further Hero Investment: In 2021, Hero MotoCorp increased its stake by investing ₹420 crore ($56 million), bringing total investments to over ₹500 crore ($67 million), which facilitated scaling manufacturing and expanding into new markets.

  • Financial Growth and Performance:

    1. Revenue Growth: Ather saw massive growth in FY23, with a revenue of ₹1,784 crore ($214 million), up from ₹408 crore ($49 million) in FY22, reflecting its successful market strategies and product acceptance.

    2. Sales Volume Increase: In FY23, Ather sold over 1.1 lakh scooters, a nearly fivefold increase from 23,000 in FY22.

  • Manufacturing Expansion: Ather established a new manufacturing plant in Hosur, Tamil Nadu, with an annual production capacity of 400,000 units, essential for supporting their growth. The next manufacturing plant potentially being developed in Maharashtra.

  • Market Position: Ather currently holds an 11% share of the Indian electric two-wheeler market, positioning itself behind Ola Electric and TVS Motor Company as a key player.

Ather Energy’s funding and financial journey is a testament to its strategic investments and innovative approaches to capital raising. The company has successfully scaled operations and enhanced its market presence through partnerships with industry giants like Hero MotoCorp while achieving impressive growth across revenue, sales, and manufacturing.

The Archrival and Why Ather Has An Advantage!

Ather Energy is gearing up to challenge Ola Electric’s dominance in the two-wheeler EV market. While Ola leads with a 30% market share, Ather has carved a niche with premium, high-quality scooters and a strong R&D focus—48% of its workforce is in R&D, compared to Ola’s 23%. Unlike Ola’s aggressive expansion into multiple vehicle categories, Ather has maintained a steady, reliability-first approach, prioritizing customer trust and product longevity over rapid scale.

With a ₹3,100 crore IPO planned for 2025, Ather aims to scale its operations and take on Ola’s mass-market strategy. Its premium pricing, software-driven innovation, and focus on product quality have won over urban consumers, but the challenge remains—can it expand fast enough while maintaining its brand positioning?

More on the IPO

Ather’s IPO is one of the most anticipated events in India’s EV sector. The company has been strengthening its financials, and reports suggest it is eyeing a public listing in FY25, targeting a valuation of $2.4 Billion.

While Ather’s growth trajectory is strong, profitability remains key to a successful IPO. The company is expected to improve its gross margins (25% in FY24) and reduce losses, which stood at ₹864 crore in FY23. If executed well, Ather’s IPO could be a landmark moment for India’s EV industry, setting a benchmark for other startups in the space.

As Ather prepares for its IPO, it faces its biggest test yet—scaling while maintaining innovation and customer trust. If it succeeds, it won’t just be a win for Ather, but a defining moment for India’s EV revolution.

This brings us to the end on another successful and great story. And now it’s time for some valuable business lessons:

Business Lessons

  • First-Mover Advantage Isn’t Enough—Execution Matters: Ather was one of the earliest players in India’s two-wheeler EV market, but being early alone didn’t guarantee success. The company had to focus on product quality, charging infrastructure, and customer trust to carve out a niche. Being a first mover is great, but it does guarantee market domination.

  • Slow and Steady Growth Wins in the Long Run: Unlike competitors who aggressively scaled up, Ather took a calculated and steady approach—focusing on building a strong product, reliable infrastructure, and long-term customer trust. This slow but sustainable growth ensured fewer quality issues, better customer satisfaction, and a stronger foundation for future expansion.

This wraps up another fascinating journey, one that I thoroughly enjoyed sharing with you. I hope you found it as intriguing as I did! If you did, don’t forget to spread the word within your network. And if you haven’t subscribed to Think Tank yet, now’s the perfect time—just click the link below!

I will get back to you with more stories like these. In the meantime, take a look at these other interesting case studies:

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