Ather Bets Tech, Not Scale, Will Push Up Profit Margins

CEO says value engineering, process optimization, technology can improve cost structure

- Ayaan Kartik & Varun Sood

Ather Energy Ltd believes that selling more vehicles will not give any electric two-wheeler maker an edge in terms of better profit margins, as all companies have similar cost structures as they access the same supply chain.

Instead, it is investments in technology with a focus on improving processes that could help two-wheeler EV makers achieve better margins, according to the Bengaluru-based company's co-founder and chief executive officer Tarun Mehta.

"There's an incorrect assessment of the automotive industry that whoever produces more will have a better margin," Mehta told Mint.

"Volume has played a minimal role in unit economics over the years. There's a ton of value engineering. There's a lot of process optimization, and then there's a lot of technology improvement to bring in, which improves cost structures. Engineering is the superpower."

The comments from the co-founder of the country's fourth-largest electric two-wheeler company come at a time when its legacy and new-age rivals are looking to scale up their overall sales in the segment.

Currently, no electric two-wheeler company has achieved a break-even point for its EV business.