Ather spends 320 crores on a second production facility
- ByStartupStory | November 25, 2022
In order to boost the company’s production capacity to 420,000 units annually and reduce delivery times from months to a few days, EV manufacturer Ather Energy has opened a second manufacturing facility in Hosur (Tamil Nadu) that spans 300,000 square feet. Ather agreed to invest 650 crore over five years at the time of commissioning its second facility in 2021. It has so far committed 320 crore to this. By the conclusion of the following fiscal year, Ather also expects to construct a third manufacturing facility. However, the location of the plant has not yet been chosen.
Swapnil Jain, Co-Founder & CTO of Ather Energy, stated at the plant’s inauguration, “Rapid scale-up is susceptible to quality issues, and delivering safe and reliable products to our customers is our biggest priority while creating a vision for the plant. With deep investments and innovation done on processes and machines, this plant will help us to further strengthen our leadership in delivering quality vehicles” Ather’s new manufacturing plant is divided into two sections, one for battery manufacture and the other for vehicle assembly. The battery unit will have five production lines, whereas the vehicle assembly will have two. With a strong local ecosystem in place, the majority of Ather Energy’s supplier base is in Tamil Nadu and neighboring Karnataka, making Hosur an attractive location for manufacturing.
The new plant now produces 500–600 scooters per day, but the business plans to increase this to 1,200 scooters per day by March. The plant has the capacity to directly employ over 1100 workers and indirectly employ over 500 others. Ather Energy’s Chief Business Officer, Ravneet S. Phokela, stated that the business intends to end the fiscal year with a $2,400 crore annual run rate. Phokela said it has deployed fast-charging stations at 500 sites on Ather’s charging network and aims to install 1,400 Ather Grids by the end of this fiscal year.
Ather Energy intends to grow its retail business by entering new markets. By March 2023, the business intends to have 150 experience centers in 100 locations. Commenting on Ather’s plans to increase brand awareness, Jain said, “As we start entering into newer markets, word of mouth spread. The only way to differentiate between us and other vehicles is to do a long-term review. You can’t look at Day 1 and know which product’s engineering is better. Word of mouth has been a major leverage for us. However, to just build brand recall, we will increase our marketing spends.” In terms of the company’s finances, Jain stated that Ather is now more focused on boosting its gross margins than becoming Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA) positive because the company is investing in growth.
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