In a significant strategic move, Hero MotoCorp a key player in the Indian two-wheeler industry has announced plans to enhance its investment in Ather Energy. Hero's investment in Ather Energy would increase by three percent with the latest infusion of Rs 140 crore, to a considerable 39.7 percent and this step highlights Hero MotoCorp's commitment to the developing electric vehicle (EV) sector in India.
Hero's Foray into the Electric Vehicle Market
Hero MotoCorp, one of the legacy two-wheeler manufacturers, entered the electric vehicle arena with the launch of the Vida electric scooter in October 2022. This marked its foray into the burgeoning EV segment, following the footsteps of industry peers Bajaj Auto and TVS Motor Co, who introduced their Chetak EV and iQube in January 2020.
Ather Energy's Impressive Growth
Ather Energy, based in Bengaluru has positioned itself as a prominent player in the smart electric two-wheeler market. Together with a strong infrastructure for charging the corporation is actively involved in the design, production, and maintenance of electric vehicles. Ather Energy's growth trajectory aligns seamlessly with India's surging demand for electric two-wheelers.
The electric two-wheeler market witnessed a remarkable 38 percent year-on-year increase in cumulative sales from January to November 2023, totaling 7,83,128 units. Ather Energy, in the first 11 months of 2023, secured its position as the third-ranked EV maker, retailing 97,900 units and commanding a noteworthy 12.50 percent share in the e-two-wheeler market.
Financial Performance and Future Plans
Financially, Ather Energy experienced an extraordinary surge, with turnover jumping an astounding 336 percent year-on-year in FY2023. The figures soared from Rs 413.8 crore in FY2022 to an impressive Rs 1,806.1 crore in FY2023 and this robust financial performance highlights Ather Energy's resilience and adaptability in a dynamic market.
Infrastructure and Manufacturing Capacity
Ather Energy's strategic positioning is fortified by its infrastructure and manufacturing capacity. The company inaugurated its second manufacturing plant in Hosur, Tamil Nadu, on November 23, 2022, and this expansion increased Ather Energy's manufacturing capacity to 4,20,000 units per annum showcasing its readiness to cater to future demand.
Future Plans
Looking ahead Ather Energy is gearing up for future challenges and opportunities and the company plans to double its market share to an ambitious 30 percent. Two new e-scooters are in the pipeline for market introduction in FY2025 and these upcoming models will extend Ather Energy's product portfolio beyond its performance-oriented Ather 450X marking a strategic expansion into new categories.
On the retail network front, Ather Energy has set ambitious goals. Currently boasting around 150 experience centers across 100 cities, the company aims to expand its countrywide network to cover 120 cities and establish 200 outlets by the end of FY2024. While avoiding deep rural areas Ather Energy remains confident that its upcoming products will strengthen its potential in Tier-2, Tier-3, and Tier-4 markets.
Apex 450: Ather Energy's Defense Strategy
With the impending launch of the Apex 450, Ather Energy is strategically preparing to defend its market share against fierce competition, particularly from players like Bajaj Auto. The company is looking into new product categories and is confident that its next items will not only strengthen its market position but also greatly extend its market opportunity.
Anticipating Market Dynamics
The company's bright future and the growing significance of electric mobility in the Indian auto sector are reflected in Hero MotoCorp's decision to increase its investment in Ather Energy. With this calculated move both businesses will be better positioned to capitalize on their advantages and negotiate India's changing electric two-wheeler market.