Deal focus: Ather charges up for India's EV race

As part of efforts to build the future of Indian transportation, Ather Energy believes it needs to blend the best of the old and new economies. The electric vehicle (EV) manufacturer's latest funding round is a graphic example of this crossover, with Sachin Bansal – a co-founder of Indian e-commerce giant Flipkart – joining domestic automotive conglomerate Hero MotoCorp to invest $51 million.

Both are returning investors: Bansal committed $500,000 to the company in 2014 as one of its first angel investors, while Hero is converting $19 million in previously provided debt for its stake. Their continued participation is seen as a vote of confidence for Ather's ability to bring meaningful forward motion to an industry that is in danger of stagnation.

"There aren't many companies out there that are actually doing proprietary research and ground-up design," says Ashish Sharma, CEO of InnoVen Capital's India arm, which provided $8 million in venture debt to Ather in addition to Bansal and Hero. "You can always import some parts to put together an EV, but Ather has spent years adapting the battery management systems to Indian conditions and working on connectivity and onboard diagnostics."

Ather has already seen strong interest for its flagship product, the electric scooter Ather 450, which began delivery last year in Bangalore and is currently sold out through September 2019. The company is working on an aggressive expansion that will see it launch in Chennai in the next few months and have one million vehicles in 30 cities by 2023.

The two-wheeler form factor was chosen for its popularity in India and the relative ease of rolling out the charging network. There are plans to set up 6,500 fast-charge points nationwide over the next five years, putting drivers no more than four kilometers away from a charging point within cities. "Two-wheelers are very different from cars – for scooters and bikes, the kind of charging infrastructure needed is basically no different from a simple plug point," says Tarun Mehta, co-founder and CEO of Ather. "That's good enough, if you have the right hardware, to be able to charge at home."

The network will also be open standard, so that other brand vehicles can use it as well. Ather considers providing competitors a free boost an acceptable tradeoff since wider compatibility will encourage commercial partners to install charging stations on their properties. Flexibility is key to expanding the company's production pipeline as well. 

"I think the automotive OEMs need to change the way they think about manufacturing. Obviously, we can invest in our own capacity and people, but there's also a case for going the way of the mobile phone industry and bringing in strong manufacturing partners who can help scale production very quickly," says Mehta. "We're keeping all options in mind, because our key challenge over the next couple of years is going to be how to rapidly ramp up capacity."   

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• Topics
• South Asia
• Early-stage
• Technology
• India
• Transportation
• Innoven Capital