Ather Energy, a leading electric-scooter maker in India, said an increase in raw material costs and supply chain disruptions have impacted its profit margins despite high demand for its vehicles.
“I was hoping to break even later this year itself. I would add a few quarters to that now,” Ather Energy CEO and co-founder Tarun Mehta said.
Electric-vehicle manufacturers globally have seen a spike in demand as more people shift to cleaner transport, but a sharp increase in commodity prices and severe supply chain disruptions have slowed their growth, Reuters news report said.
Ather Energy has witnessed an addition of several hundreds of dollars in material costs due to firmer commodity prices, some of which have been passed on to customers, Tarun Mehta said.
Ather Energy has slashed the company’s production volumes due to a chip shortage and challenges in procuring lithium-ion cells for batteries, made worse by COVID-19 lockdowns in China and logistics disruptions.
Ather Energy is backed by private equity fund Tiger Global and India’s biggest bikemaker Hero MotoCorp. Ather sold over 3,200 electric scooters in June. It lags rivals Ola Electric, backed by Japan’s Softbank Group and Hero Electric.
Ather Energy, which launched the third generation of its 450X e-scooter, plans to ramp up production to 10,000 units a month by the end of the year and will fully utilize its annual output capacity of 400,000 units by end-2023.
Sales of electric scooters have surged more than five-fold in India last year, as high fuel prices pushed buyers to look for alternatives and government subsidies narrowed the price gap between electric and gasoline models.
Electric models made up just 1 percent of total Indian motorcycle and scooter sales of 14.5 million in 2021. The government targets this to reach 40 percent by 2030.