Despite the burgeoning electric two-wheeler market in India, Ather Energy sales have experienced a slight downturn. While the overall category witnessed a robust 30% year-on-year growth, Ather’s market share has actually declined. This begs the question: What has gone wrong for the once-promising EV startup?
Ather’s market share has been steadily decreasing over the past few years. In 2021 and 2022, it held a 12% market share. However, this figure dropped to 11% in 2023 and further to 9.5% in May 2024. Consequently, Ather has slipped to the fourth position in the market, behind Bajaj.
During the same period, Ola Electric has skyrocketed from obscurity to become the market leader with a 33% market share. Even TVS, which held a mere 4% market share in 2021, has surpassed Ather to claim the second position.
Ather Energy’s decline is particularly perplexing considering its early-mover advantage in the Indian market. The company pioneered the introduction of high-quality electric two-wheelers, setting the standard for the industry. However, despite its head start, Ather has been outpaced by both newer entrants like Ola Electric and established players like TVS and Bajaj.
Several factors have contributed to Ather’s struggles. One significant issue is a lack of infrastructure. The company has faced challenges in scaling up its production facilities, leading to long waiting periods for customers. This has hindered its ability to meet the growing demand for its products.
Additionally, Ather has faced financial constraints. Compared to its deep-pocketed rivals, its war chest is relatively small. To address this, Ather has relied heavily on Hero MotoCorp for funding, which now holds a substantial stake in the company. However, this dependence has limited Ather’s financial flexibility, especially in a capital-intensive industry.
External factors, such as the semiconductor chip crisis, have also impacted Ather’s growth. The shortage of components has constrained production and limited the availability of its products.
While these factors explain Ather’s previous struggles, they do not fully account for its recent revenue decline. Despite a 19% increase in sales in FY24, Ather’s revenue has decreased due to price cuts implemented to compete with rivals.
Despite these challenges, Ather has not been entirely passive. The company has been taking steps to improve its position, including expanding its retail network, developing new products, and investing in charging infrastructure. However, the road ahead is likely to be challenging, especially given the competitive nature of the electric two-wheeler market.
Reference- Ather Energy website, Blueprint article, Economic Times, Moneycontrol.com, HT Auto