NEW DELHI (Reuters) – Indian electric scooter maker Ather Energy said soaring raw material costs and supply chain disruptions were delaying the company’s trajectory to profit despite strong demand for its products. vehicles.
“I was hoping to break even later this year. I would add a few quarters to that now,” chief executive and co-founder Tarun Mehta told Reuters.
Manufacturers of electric vehicles around the world have seen a surge in demand as more people turn to cleaner transport, but a sharp rise in raw material prices and severe supply chain disruptions slowed their growth.
Ather has seen a “several hundred dollars” increase in material costs due to firmer raw material prices, some of which have been passed on to customers, Mehta said.
The company’s production volumes have also been reduced by a shortage of chips and difficulties in supplying lithium-ion cells for batteries, compounded by COVID-19 lockdowns in China and logistical disruptions, it said. he adds.
Backed by private equity fund Tiger Global and India’s biggest bike maker Hero MotoCorp, Ather sold more than 3,200 electric scooters in June. It lags behind rivals Ola Electric, backed by Japanese group Softbank and Hero Electric.
The company, which launched the third generation of its 450X e-scooter on Tuesday, plans to increase production to 10,000 units per month by the end of the year and will fully utilize its annual production capacity of 400,000 units. by the end of 2023, Mehta said.
Sales of electric scooters increased more than fivefold in India last year as high fuel prices pushed buyers to seek alternatives and government subsidies narrowed the price gap between electric and gasoline-powered models.
Yet electric models accounted for just 1% of India’s total motorcycle and scooter sales of 14.5 million in 2021. The government is aiming for this to reach 40% by 2030.
Mehta expects the industry to grow rapidly despite a recent spate of e-scooter fires around the country, which sparked safety concerns, sparked a federal investigation and hurt demand for the vehicles.
“It definitely shook up the industry. I think we’re still coming out of it…it’ll be another 3-4 months before the industry really bounces back,” he said, adding that ‘Ather has not seen a drop in demand. after the fires.
(Reporting by Aditi Shah; Editing by Uttaresh.V)
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