Tarun Mehta suggests that Ather's Phase 2 expansion could take place sooner if the demand for EVs remains strong.

Ather Energy is all set to ramp up to the second phase of its upcoming Aurangabad manufacturing facility as demand for electric two-wheelers is constantly increasing, with the company expecting that their planned capacity could face challenges, if the growth continues to rise. 

According to the company's Co-Founder and CEO, Tarun Mehta, the company has started the rollout of Phase 2 after witnessing an increasing demand in recent months. He also stated that the recently completed 2,500-crore fundraising provides flexibility to proceed with the expansion without waiting for Phase 1 to complete. 

Aurangabad Plant to Add 5 Lakh to Annual Capacity 

Thus Ather is preparing to commission the first phase of its Aurangabad, or AURIC manufacturing facility in a couple of months. The company is currently manufacturing electric scooters at its Hosur plant, which has an annual production capacity of 4.2 lakh units. As per Mehta, the facility is operating at its full utilisation followed by the steady production expanded during the first quarter. 

Once the Aurangabad facility is in operation, it will add another 5 lakh units of annual capacity, taking Ather’s total manufacturing capacity to a whopping 9.2 lakhs units per year. 

He also added that the development in the Aurangabad facility is progressing as planned, as the assembly line has already been installed, the paint shop is currently going through trial and warehouse and utility work is nearing completion at the end of this year. But Mehta has addressed concerns that this also may prove insufficient looking at the current demand. 

He added further that, “The go-live of AURIC will ramp up our total capacity from 4.2 lakh units to 9.2 lakh units later this year. But we believe that demand is increasing very fast and 9.2 lakh units per annum amounts to only 77,000 units a month. 

According to our current demand trajectories, even this may fall short in the coming months, which is why I think we were lucky to acquire Aurangabad land. We took a large portion of the land and have always planned for AURIC phase two.”

EV Demand Affects Supply 

The demand has witnessed a great spike over the past few months which has created supply constraints across several markets, according to the company. Mehta addressed that inventories have fallen from 14 days to just 3 days, while some dealerships have temporarily stopped accepting fresh pre-orders due to long waiting time. 

Mehta stated further that, “There are 50,000 pre-orders, as in many states, dealers are not accepting pre-orders, because waiting times have hit two months or even higher. Thus the underlying demand is very high.”