Why Ather energy doesn’t get same govt support as Ola electric?

The Indian electric vehicle (EV) industry has rapidly grown, with Ather Energy and Ola Electric leading. Despite being a key player, Ather Energy receives considerably less government support than Ola Electric. CEO and Co-Founder of Ather Energy, Tarun Mehta called this disparity a result of a "faulty document"—issues within the government's Production-Linked Incentive (PLI) scheme.

Ather gets less govt support

The government's PLI scheme aims to boost manufacturing across sectors, including electric vehicles. While Ola Electric has benefited, Ather Energy has been left out. Mehta says the scheme favors large, listed automakers with little interest in EV manufacturing, sidelining companies like Ather. Mehta claimed that this "incorrectly" written policy limits access to government subsidies unless a company is either a sizable, well-established player or does not produce any electric vehicles.

Even if Ather invested significantly in production infrastructure, the startup wouldn't qualify for the same benefits as Ola Electric. "It's a weird mistake that needs correction," said Mehta, emphasizing the challenges of amending government documents.

Ola Electric, founded in 2017, has rapidly scaled its operations and become a dominant player in India’s EV market. Its aggressive approach to product launches, marketing, and infrastructure development has contributed to its success. Government support and a favorable regulatory environment helped Ola Electric's revenue soar from INR 373.4 crore in FY22 to over INR 5,009.8 crore in FY24.

In contrast, Ather Energy, which started delivering its first model in 2018, has seen moderate growth. Ather’s revenue increased to INR 1,753 crore in FY24, but it struggles to match Ola’s sales. The decrease in FAME-II subsidies, a government scheme providing financial incentives for EV adoption, has hit Ather harder than its competitors.

Ola leads with higher sales, Ather lags

In September 2023, Ola Electric’s monthly sales exceeded 18,000 units, while Ather’s sales were around 6,000-7,000 units. The market share gap highlights the impact of unequal support—Ola held a 34.8% market share in FY24, while Ather’s was 12%.

Ather Energy is gearing up for a major milestone. The company has filed for an initial public offering (IPO) worth INR 3,100 crore, following Ola Electric's public listing earlier this year. Ather plans to use the funds to build a new manufacturing facility in Maharashtra and scale up its R&D capabilities.

The company’s focus on innovation and design has earned it a loyal customer base, but the playing field remains uneven. Ather’s deliberate product development approach has often placed it behind aggressive competitors like Ola Electric. However, as the FAME-II subsidy issues settle and the government launches new EV incentives, Ather can close the gap.

Ola Electric leads the market, but Ather Energy has room to grow. Its rising market share and increased investment in manufacturing and research could help it gain ground. Both companies remain loss-making, with Ola Electric posting a net loss of INR 1,584.4 crore in FY24 and Ather reporting a loss of INR 1,059.7 crore.

As EV adoption rises in India, competition will intensify—not just between Ather and Ola, but also from legacy players like TVS Motors and Bajaj Auto, who are entering the electric two-wheeler space. Whether Ather can overcome the hurdles of unequal government support remains to be seen, but the company is positioning itself for a more aggressive push in the coming years.

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