Flipkart founder-backed Indian startup launches subsidised electric scooter

BENGALURU (Reuters) – Bengaluru-based startup Ather Energy opened pre-orders for its flagship electric scooters on Tuesday, hoping to build a beachhead in the world’s largest two-wheeler market that will allow it to launch a mass-market vehicle within two years.

Some 18 million petrol-driven scooters and motorcycles are sold in India annually, clogging roads in Delhi, Mumbai and Bengaluru with some of the world’s worst traffic and highest levels of pollution.

Electric bikes so far have played a tiny role in those sales and Ather is the first major venture to follow U.S. electric car producer Tesla in designing and building its own bike from scratch.

Ather has raised $ 43 million in funding so far from some of India’s best-known investors, including the country’s No.1 two-wheeler maker Hero MotoCorp, Walmart partner Flipkart’s founders and hedge fund Tiger Global Management.

It has started building charging points in India’s tech-heavy global outsourcing hub, Bengaluru, and priced its scooters at more than double the average cost of those currently on the market – even after including an almost 20 percent subsidy from the government.

The company plans to put 2,000 of the scooters on the road through August and up to 100,000 over the next two and a half years, while also expanding to nearby Chennai and Pune.

“I think it’s better to go after a segment limited to a city, where the users can be reached in a direct way, build a brand around there and then (go) wider and wider,” Chief Executive Officer Tarun Mehta told Reuters on the sidelines of the launch.

“We will have a mass-market product in two years after we break even and build that mass-market credibility.”

Retailing at 109,750 rupees ($ 1,634.52) for the 340 model and 124,750 rupees for the more powerful 450 version, prices include a subsidy of 22,000 rupees under the government’s “FAME” scheme for the promotion of electric vehicles.

India was ranked 177 among 180 countries in the World Economic Forum’s Environmental Performance Index earlier this year and is struggling to counter the ecological fallout of surging car and scooter ownership.

The power ministry has eased regulations, making it easier for companies to set up charging stations, but to date there have been relatively few takers and no common system of charging.

Both the models come with an independent navigation system, which uses data from an in-built SIM card. The 340 model can achieve a mileage of 60 kilometres on a single charge, while the more powerful 450 can hit 75 kilometres.

Along with the two models, Ather also rolled out a 700 rupees ($ 10) monthly plan, Ather One, which includes everything from service requirement, doorstep pickup and delivery, breakdown assistance, data charges on the vehicle, consumables and all fuel.

Users can also charge the vehicle from an ordinary socket at home or at work, with Ather refunding the cost within three months.