India’s original EV startup is expanding its family – to family scooters

After a phase of relatively stagnant growth even after launching a lower-priced variant of its Ather 450S, the company has learnt its lessons,Ather Energy co-founder Tarun Mehta told Mint. It over-indexed on price when the price was, in fact, secondary to the fact that the company was simply not addressing 85% of the electric scooter market which is family-oriented buyers.

Ather now is doubling down on just that. As it heads to an IPO, potentially as early as next year, the Rizta will compete against the likes of TVS’s iQube. 

With a price ranging from ₹110,000 to ₹144,000, ex-showroom, inclusive of government incentives, the Ather Rizta has a proportioned seat to accommodate two passengers, and a spacious flat floorboard.

The company’s TVS iQube, meanwhile, is priced at ₹136,000 and higher. 

“When we launched the Ather 450S, we thought price was the big hiccup preventing us from selling more,” Mehta said. 

“The S didn’t really move the needle for us – it did move the needle from December to March where our market share went from 8.5% to 12.5%, but it was way below our 25% target by FY24. But the conclusion was – and we factored this in our pricing for Rizta – is to not play the price game,” he added.

People don’t buy an Ather if they’re looking for the cheapest product, they buy it for its quality for its design as the primary reasons, Mehta said.

“So with S, one of the big experiments that convinced us internally is not many people want to buy a performance scooter. Our cap wasn’t because of price, it was other reasons – and a big hypothesis is form factor,” said Mehta, who is also the chief executive officer of Ather Energy. 

“With the 450 in the performance segment, Ather has 12.5% market share in e-two wheelers. There is no other practical EV sports scooter in our opinion. We decided we should build other products for 85% of the market.”

So it was an incredibly timed lesson otherwise we could have priced the Rizta and burnt money – but we didn’t make those mistakes and have still pulled off a healthy pricing for the Rizta overall. We should build great products. We went a little all over the place with the Ather 450 S – but now we’ve converged our focus back on product with Rizta”, he added.

The company’s focus in the near term will be to scale the Rizta and decide what new segments it wants to enter.

“We also need to learn from Rizta. We are building capability. We are building new platforms. And what skin to put on it as a product, that’s a call we will take typically a few quarters before so you can have a favorite activity,” he said.

“Until we know how the Rizta does, it’ll be too premature to take a third product bet but because what if we conclude that the Rizta is performing great but it’s only addressing a part of the family scooter market and we need another product with a slightly different focus? “

“What if we feel we want to be in a new category? So how the Rizta performs is going to teach us a lot and I don’t want to rush into a third product before we’ve tested Rizta’s response for some time in the market,” Mehta said.

“We figured the 450S will not give us a 25% market share in EVs. Because the subset buying those scooters is only that much. It’s more and more clear to us that people have more choices and if we don’t launch in that segment, our customers will go elsewhere,” Mehta said, adding that the Rizta will play a crucial role in Ather’s market share gain.

“If we haven’t gotten it wrong, it should be our primary growth driver in the coming years. But we are making new products every year”, Mehta said.