Ather Energy, India’s electric scooter startup, raised $51 million in new round of funding on Tuesday. Known as “India’s Tesla,” the Bengaluru-based company is expanding just as two-wheelers are projected to dominate India’s EV market.
With the new funds, Ather will ramp up annual production from 6,000 scooters to 1 million. Ather also said it will set up 6,500 charging points across the country in the next five years as it expands to 30 cities.
“I am convinced that the ecosystem that Ather is building with their products is the future of urban mobility,” said Sachin Bansal, co-founder of Flipkart, who led the round by investing $32 million.
Hero MotoCorp, India’s leading manufacturer of motorcycles and scooters, converted its convertible debt of $19 million in the round. With $90 million raised, Ather is now valued at about $400 million.
Ather is positioned to take advantage of the ambitious plan India launched two years ago to eliminate gas and diesel car sales by 2030. Last month, the government implemented a FAME II program that would grant subsidies for electric-vehicle purchases, including for almost 1 million two-wheelers.
The subsidies are needed because more than half of all passenger vehicles cost less than $8,000 in India, making high-priced EVs less competitive according to a Quartz report. The low price of fossil-fueled vehicles in India is why research firm BloombergNEF estimates only 6% of automobiles sold in the country by 2030 will be electric, Quartz reported.
Even so, BloombergNEF said that it’s easier to go electric with motorbikes than cars in emerging markets like India and South East Asia because their lower prices are more competitive.
The price of Ather’s flagship scooter, the Ather 450, is about $1,766, with an increased government subsidy of about $380.
In addition to retail sales, Ather is likely to become the supplier for motorbike sharing startups like Bounce and Vogo, according to a New York Times Report.
Traditional ride-hailing platforms like Uber and Ola are increasingly overshadowed by bike-sharing services in India because of its relatively high cost. Bounce and Vogo are scrambling to provide enough motorbikes to meet consumer demand, and they hope to drive down cost by mile by going electric.