Ather Energy: Poised for Growth Amidst IPO Buzz in 2025

Ather Energy, one of India’s trailblazers in the electric vehicle (EV) sector, is stepping into 2025 on the verge of its much-anticipated Initial Public Offering (IPO). However, as the company seeks to raise ₹3,100 crore from public markets, it faces a pivotal moment to evolve beyond its steady growth strategy and embrace a more aggressive market approach.

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A Steady Path to Success

Since its inception, Ather Energy, founded by Tarun Mehta and Swapnil Jain, has prioritized service quality, infrastructure, and innovation over rapid market share growth. This measured approach set Ather apart in an industry driven by the mantra of “move fast and break things.” However, the expectations that come with being a publicly listed company could necessitate a shift in strategy.

Ather’s steady growth is commendable, but with competitors like Ola Electric dominating the market, Ather may need to rethink its approach to match the dynamism of its rivals.

The Competitive Landscape

In 2024, the Indian EV two-wheeler market witnessed fierce competition. While overall EV two-wheeler registrations surged by 33% year-on-year, Ather’s sales grew by only 20%. In comparison, Ola Electric saw a staggering 52% growth, retaining its top position with 4.1 lakh units sold and over 35% market share. Ather, on the other hand, sold 1.25 lakh units, accounting for just 11% of the market.

Legacy players like Bajaj and Hero Electric also posted strong numbers, further intensifying the competitive environment. Ola Electric’s success has been bolstered by its aggressive marketing and product expansion, a strategy Ather has historically shied away from.

Challenges Ahead for Ather Energy

As Ather prepares to enter the public market, it must address several challenges to stay competitive:

Limited Market Share: Despite a robust product lineup, Ather’s market share has not kept pace with the industry’s growth. The company must focus on increasing its sales volumes to justify its valuation post-IPO.
Product Portfolio Gaps: Unlike Ola Electric, which is expanding into the commercial segment with offerings like gig-economy scooters, Ather’s portfolio lacks commercial electric two-wheelers. This absence could hinder its ability to tap into the rapidly growing B2B market.
Battery Manufacturing Dependency: Ather does not have an in-house battery manufacturing facility, which puts it at a disadvantage compared to Ola Electric. Although Ather partnered with battery maker Amara Raja in 2024, the company needs to strengthen its battery technology capabilities to improve efficiency and reduce costs.
Scaling Infrastructure: While Ather has made strides with its interoperable fast-charging network in partnership with Hero MotoCorp, it needs to expand its infrastructure to support larger volumes and increase its reach in Tier II and III cities.

Steps Toward Transformation

To thrive in this competitive landscape, Ather Energy is taking bold steps to position itself for growth:

R&D Investment: Ather plans to allocate ₹750 crore from the IPO proceeds to research and development, focusing on battery technology and product innovation.
Expansion of Manufacturing Capacity: The company is investing ₹927 crore to set up a new plant in Maharashtra, doubling its production capacity to 9 lakh units annually. This expansion aims to meet the anticipated surge in demand and provide the scale needed to compete effectively.
Enhanced Marketing Strategy: Ather is expected to ramp up its marketing efforts post-IPO, stepping out of its traditionally conservative approach to build stronger brand visibility.

Opportunities in the EV Sector

India’s EV market is at an inflection point, with massive opportunities for growth. The government’s IndiaAI Mission and other initiatives have created a favorable environment for EV adoption. Additionally, the rise of low-speed electric scooters, driven by the quick commerce boom, presents an untapped market segment.

Competitors like Ola Electric and Hero Electric have already made moves in this space, while Ather is yet to introduce products targeting B2B customers. Expanding into this segment could open new revenue streams for the company.

Ather Energy’s USP

Despite its challenges, Ather has several strengths:

Focus on Quality: Ather’s commitment to service and product quality remains a key differentiator.
Interoperable Charging Network: The partnership with Hero MotoCorp offers better unit economics for its charging infrastructure, a significant advantage over competitors.
Family-Friendly Offerings: With its Rizta lineup targeting family buyers, Ather is addressing a key demographic often overlooked by rivals.

The Road Ahead

As Ather Energy approaches its IPO, it must balance its foundational values with the need to adapt to a highly competitive market. Aggressive sales strategies, a diversified product portfolio, and investments in R&D will be crucial for the company to maintain investor confidence and achieve sustainable growth.

In 2025, Ather is set to launch a new version of its 450X electric scooter, incorporating significant upgrades. While this is a step forward, the company needs to ensure it delivers consistent sales growth to meet its ambitious goals.

The transition to a publicly listed company will undoubtedly bring new challenges and expectations for Ather Energy. However, with its focus on quality, innovation, and infrastructure, coupled with strategic adaptations to market dynamics, Ather has the potential to emerge as a leader in India’s EV revolution.

As it steps into this new chapter, Ather Energy must navigate the delicate balance between staying true to its values and embracing the competitive spirit required to thrive in the fast-evolving EV market. The coming years will determine whether Ather can accelerate beyond its comfort zone and truly disrupt the industry.