Ather Energy Aurangabad Plant Expansion May Accelerate as EV Scooter Demand Surges

Electric two-wheeler manufacturer Ather Energy is assessing whether to accelerate the second phase of its upcoming Aurangabad manufacturing facility after demand for its electric scooters continued to exceed earlier projections. Company executives said current market momentum could place pressure on planned production capacity, prompting discussions around bringing forward the next stage of expansion. While no final decision has been made, the company believes the recently completed Rs 2,500-crore fund raise provides sufficient financial flexibility to support faster execution if demand remains consistently strong over the coming quarters.

Speaking to investors, co-founder and Chief Executive Officer Tarun Mehta said the possibility of advancing Phase 2 was one of the factors considered while determining the size of the company's recent capital raise. According to him, the additional funding gives the company the financial resources to proceed with the second phase of the AURIC project without necessarily waiting for Phase 1 to mature fully.

"We did start thinking about this as a potential requirement, which is also what played a role in how we sized up our fundraise. So the overall Rs 2,500 crores in our mind also gives us the wherewithal to fast-track AURIC phase two without necessarily waiting for more proof of phase one. So we'll see in the coming couple of quarters if this trajectory holds up, I would not rule out a phase two fast-tracking, quite a material fast-tracking," Mehta said.

Despite these discussions, management clarified that no formal approval has been given for the accelerated expansion. The company intends to monitor the performance of the first phase after commercial operations begin before announcing any official construction schedule or production targets for the second phase.

"We don't want to start phase two today or start giving guidance or a timeline today because it just feels like we should be a little bit more cautious. Just see phase one, at least go live in the next few months and then get going with phase two. So right now we are in the planning stage for phase two. If all looks well, maybe in a quarter or two max, we will have more formal timelines and guidance to share," Mehta added.

Aurangabad Facility to Significantly Expand Manufacturing Capacity

The first phase of the Aurangabad manufacturing facility is expected to become operational within the next couple of months. Currently, Ather Energy produces its electric scooters at its Hosur plant, which has an installed annual production capacity of 4.2 lakh units, equivalent to roughly 35,000 vehicles each month. Following steady production growth during the first quarter, the Hosur facility is now operating close to full utilisation.

Once the Aurangabad plant begins commercial production, it will contribute an additional 5 lakh units of annual manufacturing capacity, increasing the company's combined production capability to approximately 9.2 lakh units per year.

Ather Energy Manufacturing Capacity Expansion

According to Mehta, the Aurangabad facility remains on schedule, with the assembly line already installed, paint shop trials underway, and warehouse and utility infrastructure nearing completion. Commercial operations are expected later this year.

He also noted that even the expanded annual capacity of 9.2 lakh units may become insufficient if present demand trends continue. Mehta explained that the company had secured a larger land parcel during the initial acquisition specifically to support future capacity expansion through Phase 2.

"GoLive of Auric will take our total capacity up from 4.2 lakh units to 9.2 lakh units later this calendar year. But we believe demand is ramping up very fast. 9.2 lakh units per annum is only 77,000 units a month. We believe on current demand trajectories, even this may be tight in the coming quarters. Which is why I think we were lucky here when we took Aurangabad land. We took larger land capacity and we had always planned for Auric phase two," he said.

Strong Demand Continues to Outpace Production

Rapid growth in demand has created supply constraints across multiple regions in India. Dealer inventory levels have reportedly declined from around 14 days to only three days, while several dealerships have temporarily stopped accepting fresh pre-orders because customer waiting periods have extended to nearly two months or longer.

The company disclosed that approximately 50,000 customer pre-orders are currently pending. Management estimates that production limitations prevented the sale of an additional 13,000 to 15,000 electric scooters every month during the first quarter, highlighting the widening gap between customer demand and manufacturing output.

"There are 50,000 pre-orders, despite the fact that in many states now, our dealers are no longer even accepting new pre-orders, because the waiting times are now hitting two months or even higher. The underlying demand we strongly believe is very, very high," Mehta said. "We believe today that of the 30,000 units that we retail average in Q1, we could have probably sold an incremental 13,000 to 15,000 units extra every month."

New EL Scooter Platform Scheduled for August Launch

The company expects another increase in customer demand following the introduction of its new EL scooter platform, scheduled for launch on August 29. Production has already commenced at the Hosur facility, homologation activities have been completed, and high-volume production trials are currently underway. Manufacturing will initially remain at the Hosur plant before progressively shifting to the Aurangabad facility as production ramps up.

Ather Energy plans to increase manufacturing capacity for the EL platform to approximately 60,000 units per month across both production facilities. The commercial name of the new electric scooter will be revealed ahead of its official market launch later this month.

Frequently Asked Questions

Why is Ather Energy considering accelerating the Aurangabad plant expansion?
Ather Energy is evaluating an earlier rollout of Phase 2 because electric scooter demand has risen much faster than anticipated. The company believes its planned production capacity could become constrained despite the addition of the first Aurangabad phase. Backed by its Rs 2,500-crore fund raise, the company has financial flexibility to accelerate expansion if demand remains strong, although management has not yet announced a final decision or timeline.

How much manufacturing capacity will Ather Energy have after Aurangabad Phase 1?
Once the first phase of the Aurangabad manufacturing facility becomes operational, Ather Energy's annual production capacity will increase from 4.2 lakh units to 9.2 lakh units. The company expects the new plant to add 5 lakh units of annual capacity while supporting production of its upcoming EL scooter platform. Management believes additional capacity may still be required if current demand growth continues over the coming quarters.