Ather Energy Skips Price Wars for Profitability

Ather Energy is prioritizing profitability and long-term investments over aggressive scaling in India's competitive electric two-wheeler market. CEO Tarun Mehta stated the company's strategy focuses on maintaining gross margins and investing in platforms, charging infrastructure, and intellectual property, rather than engaging in subsidy-driven price wars that could erode profitability.

Mehta declared that Ather will not price its scooters below ₹1 lakh, calling it a 'Lakshman Rekha.' This disciplined approach is necessary as Ather operates with a structural cost disadvantage compared to rivals benefiting from Production Linked Incentive (PLI) schemes. The company aims to achieve profitability through operating leverage, with higher volumes driving earnings once a minimum gross margin of over 20% is established.

Addressing concerns about expenditure, Mehta reframed Ather's spending as long-term capital investment rather than transient cash burn. He highlighted that investments in physical capital, charging networks, and intellectual property contribute to sustainable growth and have long life cycles. This strategic focus on margins first, followed by volumes, aims to build a solid foundation for the company's future.