India's largest two-wheeler manufacturer Hero MotoCorp on Friday said it has invested Rs 84 crore in the Bengaluru- based seven-year old electric two-wheeler start-up Ather Energy. With this Hero has increased its stake in Ather Energy to 34.58 per cent.
Hero MotoCorp has been a part of Ather's growth story since 2016, when it first invested in it as part of Series B funding. Prior to the investment, Pawan Munjal's company had a shareholding of 31.27 per cent in Ather Energy.
This was an extension of Ather's series C round of funding that was led by Flipkart founder Sachin Bansal.
"We are in a high growth phase of our journey, and while the last few months have been challenging, we have not altered our expansion plans," said Tarun Mehta, Co-founder & CEO, Ather Energy. "Our geographic expansion and the roll-out schedule for the Ather 450X are on track, and we will be using these funds to invest in our facilities to meet the demand we have seen for the Ather 450X across the country. "
After the launch of its flagship product the 450X a few months ago, Ather is now looking to scale up to 20 cities by the end of 2021. The company has said the 450X will be available in cities like Hyderabad, Pune, Delhi and Mumbai, with deliveries beginning in October 2020. Ather is opening a new manufacturing facility in Hosur, which is designed to produce 100,000 units annually, and is scalable to half a million units and is also setting up Ather Grid fast-charging points across the country over the next five years, making public charging easy and accessible to all electric vehicle owners.
For Hero MotoCorp, which does not have any electric offering of its own right now, investments in companies like Ather is part of the strategic decision taken by the company towards future of mobility. In February this year, the company had said it has earmarked an investment of Rs 10,000 crore ($1.4 billion) towards capacity expansion and to fund research and development in alternative mobility solutions over the next five-seven years. It had also said it was open to more collaborations and partnerships going forward.
"We are excited to see the growth of Ather Energy in the recent years. We see immense potential for them to expand their market even further, especially given the likely growth of electric vehicles (EV) in the near future," said Rajat Bhargava, Head of Emerging Mobility Business Unit (EMBU), Global Business & Strategy, Hero MotoCorp. "In addition to our efforts of developing a robust external ecosystem for EVs, we are also aggressively working on our internal EV program. Our aim is to provide accessible electric mobility to customers across the globe. Sustainability and a clean, green environment remain central to our vision to be the future of mobility."
Electric vehicle sales in India in 2019-20 stood at 1.56 lakh units as compared to 1.3 lakh units in 2018-19. Two-wheelers accounted for a vast majority of it at 1.52 lakh units.