India will need to continue subsidizing e-scooters in the coming years to encourage people to move away from polluting motorcycles, the chief executive of e-scooter maker Ather Energy told Reuters on Saturday.
Industry experts believe subsidies such as cash incentives are crucial for India to achieve its goal of electrifying 70% of its two-wheelers by 2030, as the world’s third-largest oil importer looks to reduce its dependence on fossil fuels.
“We have been able to reduce a lot of our reliance on subsidies, but that has come at the cost of almost a year of lost growth,” Ather CEO and co-founder Tarun Mehta said in an interview.
Mehta was referring to the government’s surprise decision in May to cut cash incentives for e-scooters to 15% of the purchase price before taxes from the previous 40%.
India’s electric scooter market is small but growing, accounting for 5% of total two-wheeler sales in fiscal 2023-2024. Ather was one of the first companies to push the popularity of pick-up trucks, launching its 450 series of electric scooters in 2018, but fell behind larger rivals Ola Electric and TVS Motor, whose discounts boosted sales.
Ather, which counts India’s largest two-wheeler maker Hero MotoCorp as its largest investor, on Saturday launched a new “family-friendly” electric scooter called ‘Rizta’ priced at Rs 100. 109,999 ($1,321).
The scooter has larger seats and storage space compared to its competitors. Mehta hopes it will attract a wider range of buyers in India’s densely populated northern and western regions and help boost sales.
Mehta said loss-making Arthur is focused on revenue growth, but if sales increase, profit margins will improve.
“We’re not at break-even yet and I think there’s still a ways to go, hopefully not a long time. Hopefully Rizta will play a meaningful role because I’m pleased with the change in margins at the unit level,” he said without giving details.
© Thomson Reuters 2024
