Indian electric scooter maker Ather Energy has cut its profitability forecast over higher raw material costs and supply chain disruptions.
While electric-vehicle makers have seen demand rise, a sharp increase in input costs and severe shipping delays have slowed their growth.
“I was hoping to break even later this year .. I would add a few quarters to that now,” Ather chief executive and co-founder Tarun Mehta said.
Ather has witnessed an addition of “several hundreds of dollars” in material costs per unit due to firmer commodity prices, some of which have been passed on to customers, Mehta said.
The company’s production volumes have also been curtailed by a chip shortage and challenges in procuring lithium-ion cells for batteries, made worse by Covid-19 lockdowns in China and logistics disruptions, he added.
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 behind rivals Ola Electric, backed by Japan’s Softbank Group, and Hero Electric.
The company, which launched the third generation of its 450X e-scooter on Tuesday, plans to ramp up production to 10,000 units a month by the end of the year and will fully utilise its annual output capacity of 400,000 units by end-2023, Mehta said.
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 petrol models.
Still, electric models made up just 1% of total Indian motorcycle and scooter sales of 14.5 million in 2021. The government targets this to reach 40% by 2030.
- Reuters, with additional editing by George Russell