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Ather Energy Targets 12% Non-Vehicle Revenue as EV Demand Surges
11 Nov
Summary
- Ather Energy's non-vehicle revenue, including software and accessories, expected to rise beyond 12% in next year
- Company overcame rare earth crisis, with revenue and EBITDA impacted by ₹19.2 crore and ₹25 crore respectively
- Shift to Lithium Iron Phosphate (LFP) batteries boosts margins, helping Ather move toward EBITDA break-even
In the past year, Ather Energy, the Bengaluru-based electric two-wheeler manufacturer, has seen a significant boost in its non-vehicle revenue, which is expected to rise beyond 12% over the next 12 months. This growth is being driven by strong demand for the company's software subscriptions and accessories, which have become a key part of Ather's business model.
According to Tarun Mehta, Ather's Co-founder and CEO, the company experienced a "fantastic quarter" with revenue rising 60-65% over the previous quarter, while losses narrowed. This performance was achieved despite a one-time impact from the rare earth crisis, which affected Ather's revenue by around ₹19.2 crore and EBITDA by approximately ₹25 crore. Mehta, however, stated that the crisis is now behind the company as it moves into the third quarter of the year.
Ather's shift towards Lithium Iron Phosphate (LFP) battery technology, which is cheaper than Nickel Manganese Cobalt (NMC) batteries, has been a major driver of improved margins. The company expects this trend to continue as LFP batteries increase their share in Ather's portfolio. This, combined with growing operating leverage, is helping the company move closer to EBITDA break-even.
The company's non-vehicle business, which includes software subscriptions, accessories, and services, has become a key growth driver. Mehta revealed that around 89% of Ather's consumers purchased additional software on top of their vehicles, and the software attach rates have increased from 50% to 75% in newer markets like Madhya Pradesh. Accessory sales have also been rising, with a 20-25% growth seen at a pan-India level each quarter.
