Three years from now, Ather Energy could either stand as one of India’s defining EV stories or risk being overshadowed in a market that is heating up faster than ever.
The company has built a strong brand recall as a homegrown electric scooter brand.
But with Ola Electric, TVS, and Bajaj accelerating their EV push, competition is only getting tougher.
At the same time, policy shifts are reshaping the industry’s cost and incentive structure.
For Ather, the next phase will no longer be about proving the product. It will be about scaling up, turning profitable, and proving its staying power.
That leaves investors with a question: Will Ather break into the mainstream or continue as a niche premium brand?
Ather Cements its Position as India’s #2 EV Maker
Ather Energy is an asset-light pure-play electric vehicle (EV) manufacturer that specialises in electric two-wheelers (E2Ws). It also offers an ancillary product ecosystem.
Ather maintains control over 80% of key hardware and 100% of its software stack. As of August 2025, Ather ranks second in the E2Ws market with a 17% market share and leads in South India and Gujarat.
The company sources 99% of E2W components domestically. Ather’s Hosur factory in Tamil Nadu has an annual installed capacity of 420,000 E2Ws and 379,800 battery packs.
As of 31 March 2025, Ather operates a three-tier retail model, comprising 375 Experience Centers and 282 Service Centers globally. It also has ExpressCare services for quick maintenance and is upgrading its service experience with Ather Gold Service Centres.
Ather follows a dealership model, where partners bear the capex and expenditure for stores and service centers, while Ather focuses on central marketing and brand building.
Ather Among Top R&D Spenders
What differentiates Ather is its strong focus on research and development (R&D). As of 31 March 2025, 46% of Ather’s on-roll employees work in R&D, making it one of the largest E2W R&D teams globally.
These efforts have led to significant advancements, including a 30% reduction in Bill of Materials (BOM) costs for the Ather 450X LR since its launch, without compromising quality.
Wide Portfolio Spanning E2Ws, Charging, and Accessories
The company offers a diverse portfolio, including the Ather 450 range (450X LR, 450X HR, 450S, and 450 Apex) and the Ather Rizt (Rizta S, Rizta Z LR, and Rizta Z HR).
The Ather 450 range boasts a range of 122-161 km and a top speed of 90-100 km/h. In FY25, 88,869 Ather Rizta units were sold, accounting for 57% of total sales.
The Ather Ritz is a recent model launched in FY25, with features like WhatsApp notifications, live location sharing, call/music control, Google Maps integration, Alexa Skills, and up to 56L of storage space.
Additionally, Ather also has a proprietary software, AtherStack, which powers all Ather products exclusively. This software offers features such as over-the-air updates, ride statistics, cloud integration, navigation, analytics, ride assistance, and safety features.
In fact, the AtherStack Pro Pack bundle, which unlocks advanced features and provides three-year access to Ather Connect, is purchased by 88% of E2W users. This accounts for 6% of the company’s revenue.
Ather also has built India’s largest E2W fast-charging network, Ather Grid, with 3,611 chargers across 360+ cities in India, Nepal, and Sri Lanka as of March 2025.
It also provides accessories, including the Halo smart helmet and Halo bit, which offer features such as music/call control, helmet-to-helmet communication (Ather ChitChat), and Auto WearDetect. Other accessories include seat covers, frunk bodyguards, and tyre pressure monitoring systems.
Signs of Profitability with Rising Volumes and Market Leadership
Ather performed well in Q1 FY26. The company volume increased by 97% year-on-year (YoY) and decreased 3% sequentially to 46,078 units.
An increase in market share drove the growth in this volume. Ather doubled its market share to 14.3% from 7.6% in Q1 FY25. Sequentially, too, market share grew by 70 basis points.
Beyond South India, Ather’s market share in Middle India (Gujarat, Maharashtra, MP, Chhattisgarh, Odisha) reached 10.7%, up 2.5 times. The expansion of the distribution network drove this.
The company added 95 stores in the first quarter, bringing the total number of stores to 446.
With higher volume growth, revenue rose 78% YoY to Rs 6.4 billion (bn). Non-vehicle revenue, which commands a higher margin, accounted for 12% of total revenue.
As a result, adjusted gross margins also increased by 117% to Rs 1.5 bn, with margin expanding to 23%.
This improvement was attributed to a combination of value engineering work, favorable commodity prices (particularly for cells), brand strength allowing for upward price calibration, and strong attach rates of software, as well as favorable product SKUs (including Rizta and 450).
Ather Energy Financial Snapshot
| Particulars | Q1FY26 | Q1FY25 | Growth (%) (year-on-year) |
| Vehicles Sold (units) | 46,078 | 23,426 | +97 |
| Revenue (Rs bn) | 6.4 | 3.6 | +78 |
| Revenue Per Unit | 121,729 | 135,307 | -10 |
| Adjusted Gross Margin (%) | 23 | 19 | +400 bps |
| EBITDA Margin (%) | -16 | -33 | +1700 bps |
| Net Loss (Rs bn) | 1.7 | 1.8 | -6 |
Source: Ather Investor Presentation (Q1FY26)
Ather reduced its EBITDA loss, with margins improving by 1,700 basis points (bps) to -16%, due to operating leverage.
However, despite the improvement in margins, the net loss narrowed by only 6% to Rs 1.7 bn due to a 10% decline in revenue per vehicle sold.
A Path Toward Profitability
Ather has outlined a clear path towards profitability, driven by cost and production efficiencies. The plan also includes aggressive expansion of its product portfolio and distribution network.
On a full-year basis, the adjusted gross margin (excluding government subsidies) improved to 12.4% in FY25, showing progress towards profitability. With Ather Rizta contributing 57% of total sales in FY25, its volume growth stood at 42%.
Ather has also unveiled its new EL platform in August 2025. This platform is designed for cost and scalability, aiming to manufacture more affordable products. These products are expected to launch next year, potentially expanding the market and margins.
The EL platform products will primarily be manufactured at the new, more integrated facility, which is expected to yield better assembly costs.
Lithium-iron-phosphate (LFP) battery packs are now live. Its financial impact is expected to become more visible in Q2 and Q3 of FY26 as its contribution to sales increases.
This company also expects service revenues to increase as the installed vehicle base grows.
Sales of accessories, such as the Ather helmet and Halo, are contributing meaningfully and are expected to see a pickup with volume growth.
This is expected to enhance operating leverage, thereby helping narrow EBITDA losses in the upcoming quarters.
Expanding Reach beyond South India
Its South India market share stood at 22%, and it is not looking to become a pan-India EV brand. A significant portion of growth this year is expected to come from Middle India (Gujarat, Maharashtra, MP, Chhattisgarh, and Odisha).
At the same time, Ather is shifting its attention to network expansion in North India (e.g., Rajasthan, Uttar Pradesh, Bihar, Northeast). This expansion is anticipated to drive dividends over the next year. The company sees significant headroom for adding many more stores in the coming quarters.
Ather also plans to launch new E2Ws models to cater to a broader range of the 2W market, offering compelling alternatives to Internal Combustion Engine (ICE) vehicles.
New Platforms in the 2-Wheeler Market
Ather is working on a mid-performance motorcycle platform, dubbed the Zenith platform, focusing on the 150-180cc segment. However, it is still some time away.
The company believes that its existing Ather 450 platform, alongside new platforms like the EL platform for cost-effective scooters and the Zenith platform for motorcycles (targeting the 125-300cc segment), will enable it to address most of the 2W market, excluding entry-level 110cc motorcycles.
The EL platform will feature a new powertrain, a steel chassis, redesigned electronics, and versatile LFP/ nickel manganese cobalt batteries, all designed to optimise costs and meet diverse customer needs.
Capacity Expansion to Meet Growing Demand
To meet the increasing demand, the company is setting up Factory 3.0 in Maharashtra. This will increase its annual production capacity by FY 27 by 0.5 million (M), leading to a total of 1.42 m e2WS per year.
Ather has planned to invest in mass media in a massive brand awareness initiative to strengthen the loyalty of organic brand.
Bottomline
Ather’s core strategy is to capitalize on the trend of premiumisation in the two-wheeler industry, particularly in the scooter segment, catering to the upgrading Indian buyer.
The company believes that as per capita incomes rise, consumers increasingly seek upgrade options.
While the margin recovery and path toward profitability are evident, its durability amid intensifying competition is still uncertain. Going forward, the real test for the company is in sustaining volume growth and translating it into profitability.
Instead of relying solely on hype, it’s necessary to carefully analyse the company’s fundamentals, including its financial performance, corporate governance practices, and growth strategies.
Happy investing.
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