'We haven't broken even yet': Ather's CEO wants India to keep the subsidy cheques coming

India will need to keep the subsidy cheques for electric scooters coming for a few more years, the CEO of e-scooter maker Ather Energy said on Saturday.

"We've been able to cut down a lot of subsidy reliance, but it's also come at the cost of almost a year's worth of lost growth," Ather CEO and co-founder Tarun Mehta said at the launch of 'Rizta'.

Mehta was referring to the government's surprise decision in May to slash cash incentives for e-scooters to a maximum of 15% of the purchase price before tax from 40% previously. Industry experts believe subsidies such as cash incentives are crucial to India hitting its goal of electrifying 70% of its two-wheeler fleet by 2030, as the world's third-largest importer of oil looks to reduce dependence on fossil fuels.

India's e-scooter market is small but growing, accounting for 5% of total two-wheeler sales in fiscal 2023-2024.

Ather was one of the first to drive the pick-up in adoption with the launch of its 450 series of e-scooters in 2018, but has fallen behind larger rivals Ola Electric and TVS Motor, whose discounts have driven sales.

Ather's "Rizta"  is priced at Rs 109,999 ($1,321). The scooter has a larger seat and storage space compared with rivals. Mehta hopes it will attract a wider range of buyers in India's populous north and west regions, helping boost sales.

Loss-making Ather is focusing on top-line growth, Mehta said, but added margins would improve if sales volumes were higher.

"We haven't broken even yet, I think there's still a journey, hopefully it's not very long. Hopefully the Rizta plays a meaningful role because I am happy in how margins are shaping up at a unit level," he told Reuters.