In what is a significant step forward in its business expansion plan, Ather Energy, India’s leading electric two wheeler startup, has signed an MoU with the government of Tamil Nadu to set up an EV manufacturing plant in Hosur. The project will receive support from the state government under its EV policy.
The few Ather Energy factory will be set up in a built-up facility in Hosur covering an area of 400,000 sq-ft. Speaking about the new development, the company’s CEO Tarun Mehta said that the built-up option with desired scale as well as proximity to the brand’s R&D facilities in Bangalore made the decision easier.
The updated FAME-II (Faster Adoption and Manufacturing of Hybrid and Electric vehicles) policy, GST reduction and tax benefits on loans for electric two wheelers have improved the market potential for products likes of Ather 450.
Ather has neither revealed the timeline for start of production at its new facility nor the extent of investment. Given that it is a built-up facility, it should become operational in a relatively shorter period of time.
As a part of this initiative, Ather will be training as many as 4,000 in requisite skills in EV sector over a span of 5 years. The facility would be generating significant direct and indirect job opportunities in the region which is well known for automobile and auto component manufacturing.
The new factory will play a crucial role in the electric two wheeler brand’s plan to expand its presence to 30 cities in the next few years. As of now, with its low volume production run, the company is struggling to meet the demand from Bangalore and Chennai, its only two existing markets. Next year will see Ather entering other important cities like Hyderabad, Pune, Delhi and Mumbai.
Ather Energy’s move to establish a bigger factory comes at a time when Bajaj Auto is gearing up to foray into the electric scooter space. The decent scale of production is imperative for Ather to retain its first mover advantage and garner a respectable market share in a segment that is set to witness a flurry of activity in the foreseeable future.