₹1 lakh is the ‘Lakshman Rekha’
“For us, the Lakshman Rekha is ₹1 lakh. We will not go below that,” Mehta said, underscoring Ather’s focus on price discipline over aggressive volume-led expansion.The stance comes even as several EV makers push deeper into the sub-₹1 lakh segment to drive adoption. Mehta argued that without Production Linked Incentive (PLI) benefits, Ather starts with a nearly 15% cost disadvantage compared with rivals that are either beneficiaries of PLI or are less focused on deep electric innovation.
“We don’t have PLI, so we are balancing a very difficult task starting off with a 15% disadvantage. We have to be very careful about which segments we enter,” he said.
Ather’s current entry-level offering, including the Pro Pack, is priced above ₹1.2 lakh. According to Mehta, this leaves room to bridge the gap without diluting margins or brand positioning—rather than chasing the lowest price points in the market.
Reframing cash burn as long-term investment
Addressing concerns around profitability following Ather’s recent listing, Mehta sought to reframe how investors view spending in the EV business.
“A lot of people see cash burn and immediately compare it to internet businesses that throw money at customer acquisition. That’s not what we’re doing,” he said.
Mehta emphasised that a large portion of Ather’s expenditure is long-term investment, not transient burn—spanning physical capex, charging infrastructure and intellectual property.
“A good product can last you 15–20 years. A good architecture can last even longer,” he noted, adding that these investments do not disappear once annual revenues are booked.
Clear buckets of investment
Breaking down Ather’s capital allocation, Mehta said the company is investing across multiple layers of the EV ecosystem:
- Scooters: Product-led investments
- Motorcycles: Platform-led investments
- Charging infrastructure: Physical, long-life infrastructure assets
Each bucket, he said, has a different return profile, but together they form the foundation for sustainable scale.The profitability roadmap: margins first, volumes next
Mehta also laid out a clear framework for profitability, anchored in gross margins and operating leverage.
“Once you get to a minimum gross margin—north of 20%—most of the journey to profitability is operating leverage,” he said.
According to him, 80–90% of the path to profitability beyond that margin threshold comes from higher volumes rather than further cost cutting.
“The more volumes you do, the operating leverage starts working very strongly,” Mehta said, signalling confidence that scale—not discounts—will ultimately drive earnings.
Also Read | WTO sets up panel to review India’s EV and battery policies after China flags trade concerns
Discipline over discounting
At a time when India’s EV space is witnessing intense price competition, Ather’s strategy stands out for its emphasis on discipline, long-term capital efficiency and investor education.
Mehta summed up the approach succinctly: avoid unsustainable segments, invest in platforms with long life cycles, and let operating leverage—not subsidies or price wars—deliver profitability.
Watch accompanying video for entire conversation.
Discover more from News Link360
Subscribe to get the latest posts sent to your email.
