From 1 Scooter To 60 Skus Inside Athers Long Game Tarun Mehta

TITLE: From 1 Scooter to 60+ SKUs: Inside Ather’s Long Game | Tarun Mehta | Young Turks Reloaded | N18V CHANNEL: CNBC-TV18 DATE: 2026-03-06 ---TRANSCRIPT--- [music]

How did the idea of Ather actually happen? So, Swapnil had started this this group called Ather Energy in second year of college. So, we started building electric scooter to demo our battery [music] pack. Uh and then I remember like me and Swapnil would do high-speed demonstrations on it on the campus roads just you know try and like you know hook somebody that bought a cheap scooter and must drive it. Nobody cared about the battery, but people fell in love with the vehicle. The EV space in India is a graveyard of companies and largely startups that have are either have wound up [music] or are in the process of winding up. What choices did you make to avoid that? It’ll be very hard to beat a Honda on quality. They literally wrote the book on it. Or a TVS on manufacturing excellence. Or a Hero on scale. Or a Bajaj, Hamara Bajaj, Desh Ki Dhadkan Hero. What finally clicked for us is Um none of them [music] actually want to be a product-first company. They they they’re they’re great businesses, but nobody’s trying to be a bit of an Apple guy. [music] So, what was it like getting the people to buy into your story? If you were building a race car at college and there were a lot of these teams building race cars, Ather’s the team to join. Your competitor pretty much across across from you in in Bangalore has a very different approach to things. So many of us find this alien that you can find a lot of us find this alien. I’m like [music] you’re not going to build a a monster of a product company. What would you like the government to redo as far as PLI’s concerned? We got to find ways for PLI to support and not push startups out. Is there a list of what you won’t do? If if you find us basically announcing stuff that is super easy, super applicable, super standard, I think there’s something [music] going wrong. Uh so, that’s the that’s the one to avoid. Um Do the hard stuff. Hello and welcome to Young Turks Reloaded. I’m Shereen Bhan. Well, joining me on the show today, a company that was founded in 2013 at IIT Madras, Ather Energy began with a bold decision to build a smart software-defined electric scooter in India, designed entirely from scratch in India. Today, it commands an over 19% pan-India market share in Q3 of FY26, delivered its strongest ever quarterly performance with revenues of 995.7 crores, up 53% year-on-year, and sold nearly 68,000 units in the quarter, clocking a 50% growth. Nearly 90% of its key components and 100% of its software stack are built in-house, with almost half of its workforce and close to 15% of its revenue invested in R&D. Software and non-vehicle revenues now contribute about 14% of total income, strengthening margins as the company moves closer to break even, all without PLI benefits. As Ather prepares its lower-cost EL platform and expands capacity, the larger question is, can India build globally competitive deep-tech hardware champions? Joining me to talk about all of that and more is Tarun Mehta, the co-founder and CEO of Ather Energy. Tarun, it’s great to have you. Thanks very much for joining us on Young Turks Reloaded. Before I talk to you about the present, I want to travel back into the past. You were very comfortable with the idea of becoming a consultant. That’s what you wanted to do. You decided to take up a job at Ashok Leyland and Ather was not part of the the plan or the vision board, was it? I know it actually goes beyond that. In college we joined an entrepreneurship club. Huh. And our understanding of what entrepreneurship is was quite bad at that point. What was the understanding? To get into an IT company, get a job in an IT company. That was it. That was it. We figured this was this basically meant better jobs. Huh. We we missed the basic word definition of the word entrepreneurship for a while. So you know, a lot of us actually generally thought that the agenda here was to to figure out how to get a better job and that journey meant a non-engineering job and consultants paid well as did FMCG companies. Ask any IDN from my era, you know, like 10 years ago, 15 years ago, they’ll all give you the same answer. Huh. So IDC, HUL, McKinsey, BCG, Bain, Standard After having gone through engineering school. Yeah, yeah. So So this was a bit of a dichotomy, but everybody kind of figured, you know, that’s where the the salaries were, so you had to go there. So yeah, like I was not immune to it. Tried really hard to dress up my resume to to sort of, you know, get all the ticks to get that consultancy job. But I was really lucky. That it didn’t happen. Didn’t happen. So You think if that had happened, you wouldn’t be here? Oh, absolutely. Golden handcuffs. No chance. No? No chance. So let’s let’s now move forward to the fact that you decided to first join Ashok Leyland, and then how did the idea of Ather actually happen? So me and Swapnil, my co-founder, so Swapnil had started this this group called Ather Energy Huh. in second year of college. Okay. It had like a bunch of young bunch of first years and him like trying to do something. I joined them in the second year. Okay. And then very quickly everybody else left. So it was just me and Swapnil left. And we were trying we we we pushed everybody out, is it? No no no. [laughter] The two The two of us were the only folks stuck with this idea and who continued to romanticize the idea of starting an energy company in India. We We really philosophized a lot about how energy is like the mother of all industries and our life should be dedicated in reducing the cost of energy in whatever way we can. So mobility was not part of the plan at all? It could have been a secondary topic, not the primary topic. Like building electric indirectly added up because going electric reduces the cost of transportation by a factor of five times. So it’s it’s attractive, but that was not the primary idea. So we were trying to start this thing called Ather. Um All the ideas that we tried in college didn’t work out. One of the patents we’d filed was on battery packs and that kind of took us back to this post-graduation. So see the consultancy jobs hadn’t worked out and both of us had both of us sat down and took this call at that point that let’s stay close to engineering because we spent a lot of time doing it anyways in college. We seem to be reasonably good at it. So we want to come back to this idea Ather. We just figure which idea brings us back. And very quickly we had this idea of battery packs. We figured we’ll actually be an energy company. We’ll just build battery packs for other OEMs and maybe sell them electricity be a genuine energy company. Couldn’t find a single OEM who would buy the battery pack because nobody wanted to build an electric vehicle. So we started building an electric scooter to demo our battery pack. And I remember like me and Swapnil would do high-speed demonstrations on it on the campus roads just to you know try and like you know hook somebody. That what a good scooter it must drive like that. Let me understand more about the technology. Nobody cared about the battery, but people fell in love with the vehicle. And that’s how the mobility side of the story started. Yeah, so and that that’s made us that made us realize that you know, as much as you want to be an energy company we actually like the idea of building a product. Mhm. And building a vehicle could be our ticket to that. Huh. So, we decided to do that. You know, I remember you wrote a blog post where you said that you wanted to address doing something that would solve a hard problem. And it wasn’t it wasn’t really about product market fit or any of that to start with. You wanted to address a hard problem. It sounds it sounds very cool, but what was it that drove you to to look at it that way? What got you to look at your entrepreneurial journey from that lens? You know, this is just part of the mental makeup and DNA for both Swapnil and I. Mhm. I I think we’re too paranoid about competition. And hence we only like doing stuff where we believe we’ll have no competition. And broadly very limited. And that like like every time there’s an opportunity to do something, I think our mind just goes directly to okay, what is the what is really the moat here? Like the moat can’t be oh, we thought of this first. Yeah. That’s not hard enough. Anybody can replicate that with more capital. Or better brand or whatever, right? So, the moat generally has to be either it’s a very hard engineering problem Mhm. or it’s a very hard design problem. If it’s neither we’re we I found us to be generally quite okay with the idea of saying you know what, let’s not waste time doing it. We we’ve got a lot of other things to do. We can probably dedicate our time somewhere else. Huh. So, yeah. I I think that automatically filters us always to to things that are generally complex from an engineering or a design perspective. Because you believe that that will give you your differentiation. Moat. We need a mote. Like I’m like I I think both of those are very clear. Like we don’t want to do stuff that that everybody can recreate on a whim. Because then what’s the point? Like life is too short. We didn’t start this even to be build an EV company. We want to have an impact. We want to build an energy company. Our impact’s got to be measured by how much reduction we brought into the cost of energy. Like like stuff like that. Then you want to not waste time doing stuff that everybody could have done or will do. Then you’re just fighting for market shares. But that’s exactly how this has played out, hasn’t it? I mean, if I look back at the last 10 years, the EV space in India is a graveyard of companies and largely startups. I mean, the companies who were leading the race, Hero Electric, Okinawa, Tork, Ulti Green. I mean, there’s so many. I can’t even remember half the names anymore that have are either have wound up or in the process of winding up. Many in NCLT at this point in time. Why do you think that’s the case? And what choices did you make to avoid that? I See, every company is different and everybody’s approach is different. So, I wouldn’t say that our choices were correct. I can say that they were more suited for us as founders. Um We’ve always believed that I think we’ve always had a lot of respect for our legacy peers. We’ve always like I I remember we’ve said this several times that think of us starting up. We we’re getting into a business where it’ll be very hard to beat a Honda on quality. They literally wrote the book on it. Or a TVS on manufacturing excellence. Or a Hero on scale. Or a Bajaj, Hamara Bajaj, Desh Ki Dhadkan Hero. You can’t beat these guys on marketing spends. You can’t beat them on distribution. You take distribution out, scale out, manufacturing out, quality out, cost out, what are you left with, right? In automotive. So, so what we realized after a lot of thinking and we spent a good year thinking. Actually, we are one of the few like we are very weird as a startup because we didn’t build anything for the first full year. We actually didn’t even bother registering the company. We are out of a job. We we were just sitting around filing away ideas until we were really convinced about something and what finally clicked for us is Um none of them actually want to be a product-first company. They they they’re great businesses. But nobody’s trying to be a bit of an Apple here. Nobody’s trying to think of the consumer first and conceptualize an user experience around them. And nobody’s trying to take control of all the design, all the engineering. People are taking control of the manufacturing. They want to control the factories. They don’t want to necessarily control the R&D. So, what if you Well, why would you say that? I mean, they’re developing the tech. They’re developing the R&D in-house as much as you have. It wouldn’t make sense historically because IC engine technology evolved a lot by by the early 2000s. It would actually not make sense for us as an OEM for you to say, “You know what? I’m going to invest in combustion technology or fuel injection technology or you know, like the transmission technology. It’s super mature. You should let global suppliers, you know, chip away half a percentage improvement with thousands of people every year at it. EV changed the game where 50 people could improve efficiencies by 10% or you know, improve scale by like you could have a disproportionate impact. So, we realized we and we learned this from Tesla obviously because Tesla was really opening up a new playbook of how to build an auto company. Did you study Tesla closely as you went through this process? We actually took a different approach. We we studied them first from the public markets perspective because Tesla was public and heavily shorted and heavily red stock. So, I spent months reading every single article I could and every comment I could on Seeking Alpha, which is this Yes. which is the website where you know people discuss stocks in US. I had everything because and I realized some of these analysts do a damn good job of, you know, uncovering the technical decisions that Tesla’s making. And then we made a bunch of trips and met a lot of people who were at Tesla trying to understand, you know, how they thought about a lot of these decisions. And realized that there is an opportunity to to say that for all the EV related tech we want to bring the design in house even if you don’t necessarily bring all the manufacturing in house. The manufacturing can be with partners in India, but we want to control all the IP. And and we want to be product first company, which means we’re going to actually differentiate our product so radically that we will stand out. Which hasn’t been a big need in this space. You can have a very similar product, minor variations, you stand out on your brand or your distribution, etc. etc. So I So that’s what worked for us. I can’t speak for what may not have worked for others, but this is what seems to have worked for us, tech and product. Getting your first employee on board, what what was that like and then building the team around the idea that you had? You know, there there must have been a lot of people who doubted the vision, which you were in the process of figuring out yourself anyway. So what was it like getting the people to buy into your story? Actually funnily we didn’t get people in for the first several months until me and Swapnil really believed in something very deep. Huh. But then we started getting people. Our first literally our first intern who’s still with us as head of design came in as an intern back then. Um Honestly, the first maybe a hundred people that we got in, not just the first five or ten, actually the first hundred people literally came in because we gave them a very simple we had a very simple pitch. We’re going to build a vehicle. We’re going to build a physically a vehicle with where design is going to lead the way. Mhm. So, we’re going to first sketch this vehicle out and then that starts the hard engineering problem of figuring out how to engineer the product inside the sketch. Right? So, the sketch constraints are already out there. Now, figure out how to package everything within the sketch. Uh I think that was an incredibly hard and a very exciting problem statement for a lot of young engineers. And particularly in the mechanical and electrical side, we quickly realized that we were just becoming a magnet because uh automotive companies in India were not giving people this opportunity that hey, you can come and at your age of 21, 22, 23, you get an opportunity to actually design something that could go into production and you’ll get a salary for it. Your option was to stay in college and build a formal FSAE car, which is one of the race cars, uh and not obviously get paid for it, or join a big auto company where you would spend the first 10 years earning your right to, you know, touch anything useful. Yeah. Um we realized we had the sweet spot where Ather became very quickly and the word spread in the network really fast among all engineering colleges that if you were building a race car at college and there were a lot of these teams building race cars, Ather’s the team to join. Like, you know, they will actually pay you a salary to continue doing the same stuff post. Um so, we got a lot of really good builders. So, how many iterations of this sketch went through before you decided this is the one? We actually had two different phases. The sketch was a pristine sketch phase. We actually had no engineering happening at that point. Uh that probably would have lasted us, I don’t know, 6 8 months. Once the sketch was frozen, uh and those sketches are still up there on our in our offices, we barely touched the sketch. We spent solid four years engineering the product within that sketch. Mhm. Four years may sound long, but I think those were some of the environment, it is. But I think those are some of the fun the the best four years for anybody working at Ather because it was like an extremely extremely academic environment. You know, you go to you mean by that? You go to discuss pure engineering problems. You know, you you were unconstrained by any other externality. We I think we managed to create a very very solid cocoon uh where only design consumer input sort of came in. We we kind of protected the company very strongly from any other distraction. Uh we we’ve we’ve said this internally a lot with a lot of pride. Mhm. We don’t pivot. We we don’t like pivoting unless we’re really convinced, which means we’re going to think a lot, but once you commit to building something You stay the course. We generally have thought this through hard enough that an average engineer does not need to worry about, you know, changing reality every single day. Mhm. That you can you you know that that product will kind of launch. Mhm. Uh the architecture will evolve, but the product will launch. We this we learned uh I think from Apple. Um uh semiconductor When Apple was poaching a lot of semiconductor folks, I remember meeting one of them and them saying and asking that why are you joining Apple? Apple Apple’s not known for semiconductors. And his answer was, you know, this is the one place in the world where I know that the that the chip I’ll work on five years, eight years, nine years later will see the light of the day. No distractions if I’m competent. So so I think we give that to engineers. Yeah, and this is interesting because uh your competitor pretty much across across from you in uh in Bangalore has a very different approach to things and very often uh you’ve you’ve been asked questions about have you been too slow? How do you respond to that? And you know, what has it taken to actually keep those distractions, keep that need for speed, which has become almost the sort of mantra for success or has been believed to be perceived to be the mantra for success at bay? I think that assumption betrays a poor understanding of building physical products. Speed is built institutionally over a period of time. A keenness to just deliver anything something on day one creates a very poor ability to sustain that and launch new things later. If you look at our launch trajectory first 5 years we had one product in one color by the way. Okay. [laughter] 6th year we had two products five colors. 7th year we had I believe 10 products. Today we have I think I don’t know like I think we have 63 SKUs and I think we have like dozens of variants two distinct product lines. We’re getting ready to launch a third product which will probably double this entire volume up. We we are we probably have the widest product portfolio in the in among the largest scooter manufacturers today. We’ve gone a full 180 degrees from having the smallest portfolio literally one product one variant one color to having one of the widest portfolios today in this market and there’s massive acceleration here. Like every year we are able to unlock 5 6 7 new variants with increasing complexity. Because you have to invest up front. This is a business where you got to invest up front in getting your platform side getting your technology right. I think we we’ve seen far too too few companies in India where somebody’s tried to build a product business somebody’s tried to build a platform from scratch. Which is why so many of us find this alien that you can find to get over but for that could be the guy who has I’m like which we can get you not going to build a monster of a product company like you want to build an engine that can keep spamming out successful products all the time. You don’t want a one-hit product wonder. You don’t want something that worked once, you know, because a bunch of magicians were behind it and you know, disappeared. There’s no ability to recreate that magic. There’s no ability to sustain that magic. You want a system which for the next 30, 40, 50 years will launch something amazing every single year. We literally call this now at Ather one magical experience per year. Like forget products, forget variants. Like on an experience level, we’ve got to do something one magical thing every year that will just hook hook customers. Like like something that others won’t even bother recreating and the way Ather’s built it is absolutely magical. So, what was the one magical experience in 2025 and what is going to be the one magical experience in 2026? 2026 you’ll have to wait for the launch. But 2025 yes, but 2025 for us that experience was I would say infinite cruise. We launched infinite cruise as a very different implementation of cruise control and I would take a claim that I think this is the most refined cruise control implementation in the auto industry, certainly in the two-wheeler industry globally. And it’s an Indian company absolutely. I would definitely make stake that claim. And it’s an Indian company sitting here completely RIP, no joint ventures, no technology acquisitions that’s cracked the code. And not only did we launch it, we are now remotely we we are now remotely pushing it to more and more vehicles. December we pushed it to 40,000 more vehicles remotely as a software upgrade. It’s a beautiful experience where you never go out of cruise. It works in all environments, all settings. It’s it’s it’s beautiful. We launched something in 2023 it was called auto hold where the scooter detects slopes and you know, automatically activates brakes. And it does that without electrical brakes. So, there is no hardware cost increase. We did that in 2024 with the twist where we remove the need to use physical brakes. So, so we’ve been trying to crack these new experiences every year and swimming core to how we do product development. So, so and that’s what I want to understand from you. What does it actually take to crack the code? You gave us several examples of these magical experiences. When you start the year, you know, how do you think about it that this is the one magical experience that we want to go after this year? What is the process of that? We’re trying to make this a process, but I think what’s working for us right now is creating an environment where there is an amazing outflow from the engineering teams of creative ideas of what we could bring to the product. Like basically making engineering teams more and more aware about what’s good for the product. I would say it’s half the job done. Uh if engineering teams themselves can conceptualize that this is a good experience and this is not. I I got a thousand engineers. Like like that is a lot of raw horsepower to you know sort of throw at this. Uh I I think we’ve been lucky and a bit successful in getting our engineers more and more involved in in dreaming of a great product and great experience. So, ideas come first from there and then pairing design and marketing very close to this this raw output. To to then crack, you know, out of these 10 different ideas, what is it that we can take and really really [clears throat] elevate. Uh and and create something magical out of it. But how do you create that culture? And I ask you this as you said, you know, you’ve got a thousand engineers. Uh every everyone’s trying to imagine what the next version of this product is going to be. How do you create that culture of creativity, of imagination, but also uh link that to commercial success and commercial viability? It’s a big org structure conversation about how you know and that’s mostly my co-founder Swapnil who’s come up with this really crazy org structure where uh uh there are a whole bunch of people on the engineering side whose job is only to think of commercial success. Uh and and and and and hard business constraints. Um But how do you do that? At its very deep I think founders have to be involved, simple. I I think founders deep down have to be people who really care about the Uh really care about this stuff. Uh and uh you know, you’re going to be passionate pushing people across levels to you know, to to give this kind of an output. See, basically a system will go where its leaders want it to go, simple. Where do you want it to go today? Oh, we want to build great products. We want to build great products and we want to do that using amazing technology, simple. Like if if if that great product experience does not require any tech, we would probably think twice. And if it’s not a great product in the first place, we would definitely think several times. So, build a great product and do it with a lot of moat because it you know, it requires really complex engineering behind it. That’s it. That’s all we care about. And obviously scale. Like there’s no point of doing that with like a 4 lakh rupee electric scooter that only like 10 people in Europe will buy. You want to do this at scale in India. So so that’s also becoming that’s also obviously very important. Uh but but if if if me and Swapnil are constantly asking people to push on these two envelopes, uh push on these two axes, then the best people will respond. Like they will they’ll automatically think on these lines because they know that that’s what the founders are pushing you to you know, sort of come up with. Mhm. Uh And I I I I think that’s that’s the core. There’s a lot of process around it, but that’s the core. I want to go back to the statement that you made about this kuch bhi nikaldo mentality. And you know, given the pressures that we see uh and today you’re a listed company, so there are shareholder pressures as well. How do you stay away from this kuch bhi nikal do mentality? Well, we’re a fairly fairly new listed company. So, I won’t say that we have a lot of experience with market pressures. What we’re trying to do is stay honest, not guide too aggressively. Actually, not guide a lot, honestly, because we don’t know how people interpret us. People could just fly off the handles and optimism. So, we try to tend we tend to predict or or guide as little as possible. In fact, we’re very careful not to talk about products that are more than a year away, because we we we’ve seen it work negatively in the past for some other companies. Yes. So, so we we we we limit conversations only to stuff that’s eminently on the horizon. But, it comes with the pressure that everything that we then guide kind of is taken a lot more seriously. So, it it cuts both ways. Is there a list of things that you will not do given what you’ve seen other people do in the industry, and pretty visible evidence of how it’s worked out? Is there a list of what you won’t do? Actually, I’ll keep it very very fundamental. The primary stuff we would not want to do is stuff that does not involve any moat. Things that Aether can’t do differentially are things that are not hard enough problem statements. I think 99 times out of 100 we’ll probably say leave it for somebody else. Somebody else can win better with it. It’s not for us. So, so honestly, if you if you find us basically announcing stuff that the big announcements are things that are super easy, super applicable, super standard, I think there’s something going wrong. So, So the that’s the one to avoid. Um Do the hard stuff. Do the hard stuff. Speaking about doing the hard stuff, let’s now talk about EL because that’s the next big magical idea, so to speak. Those are my I’m picking up on your words. I don’t know if that is the one magical experience for you in 2026 that you’re hoping to create. But what do you want to do with EL? What do you want to achieve with EL in terms of scale? Because that’s clearly the vision as you pointed out. Yeah, so EL actually at its root EL is not a big complex. EL is actually us generally taking a low-hanging fruit because it was available. Simplify our cost structures. Our cost structures, given that we are born in a more resource constrained environment, our product cost was high on the mechanical items. Our frame is expensive, transmission is expensive. So find ways to cut that cost down to to offer a better choice, a better cost to the end consumer. But at the same time preserving stuff that we are actually good at. The reason people probably buy an Ather is because of the stability of our powertrain and our software. So how can we preserve these two things, still reduce cost, and pass that benefit to the consumer? That’s the context in which EL was born. But and and this goes back to, you know, if if the entire engineering and design design teams know that what you want to do is is pull off these magical experiences every time, even with this simple ask or not simple ask, it’s in this clear ask, we’ve seen the emergence of a lot of ideas where the experiences are rapidly becoming magical. We did talk We did touch upon some of them when we when I announced EL a couple of quarters back. Set for launch later this year. For example, how we are bringing the motor controller and the charger together in a single package. Mhm. And what kind of experience does that open up? I I think it opens up not just The easy answer is yes, it opens up onboard charging. So you don’t have to carry a charger with you, right? So, it’s easy. It’s convenient. But, what we’re realizing rapidly is it’s actually becoming a fairly powerful experience because um the kind of charging and the speed of charging it’s opening up. So, there’s something to announce there. We we’ve just talked about it. We haven’t described it, but we’ve been able to crack a new architecture, which we are calling as advanced electronic brake system, EBS. Okay. It’s It’s something that recreates an ABS-like braking control, Right. but at like 1/10 or 1/100 of the cost. Uh so, this is a massive innovation in terms of brake technology. So, uh and the experience is really good. So, these are some things that many others when we launch, but these are two that we’ve already publicly talked about. So, what is this going to mean in terms of cost for the end consumer? Uh you know, the expectation is do you go sub 1 lakh? Is that going to possibly be possible given everything that you just spoke about and the many innovations that you’re experimenting with? There is a market of products below 1 lakh in our industry. Our estimate is that maybe about maybe about 20% of the industry is below a lakh. Uh again, it’s our estimate uh today. Um we believe that we’ve got to focus. We can’t go after every single segment, every single price point. Um particularly when we don’t have PLI. We don’t have PLI, so we have this huge 15% disadvantage compared to people who don’t even want to probably build electric. Yeah. So, as as people who want to probably push the envelope on electric, we’re balancing a very difficult task that we are starting off with a 15% disadvantage here. So, we’ve got to be very careful not get into segments where there could be a uh there there could be a you know, there could be a lot of blood bloodletting that happens, uh a lot of cost pressures that come in. So, for us the Lakshman Rekha is 1 lakh. We will not go below that. Mhm. But, I think it still leaves a lot of gap. Today, our entry-level model, including the software pro pack, is is is more than 120k. Mhm. So, I think there is an obvious gap that we can bridge here, which is where YEL can fit in quite nicely. Well, so 1 lakh is the Lakshman Rekha, as you said, and you’re not you’re you’re not going to that is the red line that you’ve drawn for yourself. Yeah. Uh but, you know, coming back coming back to the EL. Now, you talked about the PLI, and unfortunately, you were not eligible for the PLI, so that is a disadvantage that you currently have. What is happening in the world with subsidies? I mean, you’re seeing subsidies being withdrawn world over. We don’t know whether the PLI in India will continue or not. We’ve seen issues with the Fame scheme, which have in fact resulted in many of those companies having to shut down, as I pointed out at the start. So, you’ve always been designed for a world without subsidies. Do you believe that eventually it’ll work to your advantage as subsidies start to be wound down? Yeah, so I I think uh in retrospect, I think the government did a pretty good job managing subsidies. Mhm. Could have been always better, but on the whole, I think the subsidy management turned out to be quite on point. Because subsidies were at their at their absolute peak when the industry scale was really low. Yeah. And particularly, the commodities were really terrible. Like, we are talking about an era when lithium ion cell prices were like 3x higher than today. Yeah. So, I think subsidy played a superb role in getting the industry at least started. It phased out a little too aggressively. Uh I still believe there’s a role there’s at least some more continuation role for subsidies because of where commodities are today in the EV industry. But, I think on a whole, governments managed it quite sensibly. Um PLI is obviously a disadvantage, and it’s such a powerful policy. I think PLI can truly unlock new EVs that don’t that we we’re still seeing a fairly small portfolio of electric scooters, electric two-wheelers today. Why are there not more electric two-wheelers? Why are there not more successful electric bikes? Why are we not seeing more export energy? Why are we not seeing more capacity creation? I honestly believe PLI can and should unlock a lot of that. It has all the right ingredients. What would you like the government to redo as far as PLI is concerned so that A, we address some of the issues that you spoke of but also that you become eligible for it? So, our view is that I I think it’s a very powerful policy. It’s worked so beautifully in so many segments. Particularly when you’re looking at thinking of exports, PLI has been magical there. And I think Indian electric two-wheelers are at possibly the best moment of time in its history to to go global. Historically, there’ve been three big exporters, India, China, Japan. We know where Japan is with electric vehicles. Not really not really not really keen. China’s great with electric vehicles but not with two-wheelers. They don’t care enough about two-wheelers. They’ve actually more or less commoditized that industry. That only leaves India. And India as it happens, whether it’s us or even our peers, there’s been a tremendous investment in R&D and product that’s happened over the last 5-7 years. We are genuinely genuinely massively ahead of the rest of the world on EV two-wheeler technologies, cost structures, and scale. We can flip that to become one of the biggest exporters. And this is a hundred billion dollar market of electric two-wheelers of two-wheelers in general. So, I think there’s a great opportunity. PLI could fix it but PLI really needs to support innovation. We’ve gotten here and we can go forward only because of the innovation engine which is mostly been startups, mostly been new age technology companies. We got to find ways for PLI to support and not push startups out. See, if you push startups out, the entire in this entire train for it to run, yes, it needs the capacity and the capital of the legacy players. But it needs the engine of startups to actually take it forward. Otherwise, it’s just going to sit idle. So, so our push constantly has been that we’ve got to find a way in our industry and even other industries, for example, drones. We’ve got to find a way for startups to be kept at the center of policy making while making transformatic policies like PLI. And and and hence we are our push that we need to find a way for auto PLI to include more startups. Think of all the good startups in this space today. We’ve invest like literally the Indian charging standard LECCS is the erstwhile Ather charging standard, right? We had the largest fast charging infrastructure in the country. We’ve got to find a way for a player like us and many others to to benefit from PLI to kickstart more exports, etc. Coming to your original question, not having PLI, how what’s that done independently for us? I think it’s it’s led to some innovation, for sure. We were able to think of We were able to conceptualize the entire business model around ProPacks and software sales, which has historically never happened in auto. There’s never been a single automotive company that’s made any real large amount of capital and and money and margins by selling upselling software, except Tesla. Tesla succeeded by selling FSD in the past, its self-driving kit, full self-driving, and now having it on subscription. So, we got pushed into a place where we had to innovate on this business model and figure out how to upsell our software. And when it started working, we got pushed into then improving that software maybe ahead of our peers because of this constraint. So, not all bad. No, no, not all bad at all as far as you’re concerned and and very often we do see that, you know, constraints lead to more innovation, which is certainly been the case as far as Ather is concerned. But I want to go back to that statement that you made that this is the sweet spot for the EV two-wheeler business in India and this could be a breakout moment for companies like yours to go global. You know, is that something that you’re now committing yourself to a global future for Ather. When do we start to see that happen for you? You know, so um I I I think it’s in the horizon. It’s still not there for me to say that we are committing ourselves to this being the next lever of growth. We we we’re yet to finish exhausting the scooter lever. And then there are, you know, other things like motorcycles potentially uh and international markets. But I do believe if you take a 10-year horizon, uh international could very well be the largest driver of value creation in our industry as a whole. Okay, so in a 10-year horizon Absolutely. That’s how long you believe it’ll take for you to look at going international? billion-dollar business. It is a hundred billion-dollar business, but uh you know you believe that you Oh, we will start going international faster than that, obviously. But for it to compound and become that that source of value creation, that source of massive margin creation as as companies like Bajaj and TVS have succeeded with, will take that much time. But but when do you feel that you’ll be ready to start going international? Oh, difficult to say, but over the next couple of years, I think uh we’ll increasingly start talking about it publicly. Okay. Yeah. Bikes, uh is is that a 10-year journey? Is that a five-year journey? Is that a three-year journey? What are we talking about? Actually, bikes are a little bit more complicated. I think a They’re going international. Yeah, I I think I’m far more clear about going international. Uh I think bikes have just too many variables at play. Uh there’s a debate of, you know, whether how much scooterization will continue to succeed, uh which motorcycles could go electric, which motorcycles will first go electric within India, outside India. And further compounded by the fact that every electric motorcycle attempt till date hasn’t really delivered an outstanding return in India. Uh we are very careful with our engineering bandwidth. We don’t want to commit to something. We don’t want to start working on something unless we’re very sure of creating a massive opportunity there. We are not there yet with motorcycles, which is why motorcycles still remains a platform development for us and not a product development yet. Mhm. So, when you talk about, you know, the difference between a platform development approach versus a product development approach, and I think many companies have tried to straddle both. What does it take to be able to marry both successfully? See, see there are two different parts of the journey. Platform development is where where we got really the architects in and and they’re thinking of all possible scenarios, right? They’re thinking of not one kind of scooter, but like three, four, five, six different kind of scooters. They’re thinking of scalability. They’re thinking of modularity. Yeah. These are the absolute wrong things to think of when you’re building a product. So, at some point, you got to switch you got to switch this thing in your head and say, “I’m not thinking modular. I don’t want this product to be this and that or that.” Great products are never modular. Great products refuse to can’t can’t be varianted like a modular mobile phone. Look at the iPhone. Absolutely not modular, right? So, so there’s a very hard switch that happens when you switch from thinking of modularity and, you know, optionality and fungibility to absolutely committing on one direction. That this is the exact consumer and this is the exact spec and this is the exact product we want to launch and we want to launch it in this timeframe. So, product thinking is a lot more commercial and a lot more committed. Platform thinking is a lot more free-flowing and a lot more open. Tarun, let’s talk about financials now. And you know, you’re a newly listed entity. So, so you’re going to be asked that question quarter after quarter. And we’ve just seen you deliver some numbers that the street has liked. But how important is it for you to ensure that you’re not just keeping costs down, but you’re also moving the needle as far as profitability is concerned? And how do you believe that picture is likely to change? What we’ve seen in the last few years is everyone’s been burning through cash. How does that picture change in the next few years? I think one big part of one big responsibility that we have is to actually help the street understand the underlying dynamics of our business because it’s very easy to think of cash burn here is cash burn uh because that’s what a lot of internet internet businesses do. You have to literally throw hundreds of millions of dollars to capture consumers to market your way into it. But a lot of the spend that we actually do is actually investments. Like these are either physical investments in actual capex or IP investments in in in products and platforms. Uh like we are investing in motorcycles, but that’s for example platform. Now on scooters, we are investing in products. Uh in charging infrastructure, we are investing in physical infrastructure. Uh and and what kind of returns we can see on it. Once you get to a certain kind of minimum gross margin, let’s say north of 20%. Uh most of the journey of profitability is operating leverage, which is volumes. So the more volumes you do, the most of the journey, I would say 80 90% of journey profitability journey is just operating leverage beyond that point. about 25, 27,000 a month, that is what you’re you’re doing. At what volume do you break even? Uh our gross margins improved. That took us from minus 36% EBITDA to maybe minus 20% EBITDA. But then our volumes went up 50 60% and that’s taken us from minus 20% EBITDA to whatever minus 5% EBITDA. Uh the current capacities can further grow our volumes by almost I would say almost 50% uh 40 50% 30 40%. And I believe that should be good enough barring like some global commodity crisis. That should be good enough to to turn profitable at least at at an EBITDA level if not a PAT level. You know, the market share game and today you’re number three at at least as as far as the latest data is concerned, right after the two incumbents TVS and Bajaj. Largely South India, you’re of course looking at expanding your presence pan India, but how do you look at the market share game? How important is that for you? We don’t look at the market share game. Obviously, we will talk about the numbers, we’ll let people understand how it’s shaped up, but we’re very clear what’s controllable, modelable and predictable on our side is monthly volume, not necessarily monthly market share. Somebody would launch a product at 80,000 rupees. I don’t even compete there and that can change the market share dynamic. So, yeah, we can we’ll obviously always talk about it, but that’s not a primary focus. Our primary focus is always absolute volume and hence margins generated. I I I I’m extremely optimistic for growth and very bullish because remember our legacy peers are 20-30% larger than us today on the back of a distribution that’s probably three, four, five times larger. So, we are sweating our existing stores a lot more and I think this is building a very strong underlying strength as our store as our distribution count continues to compound. now. I’m going to 700 this quarter and hopefully more later this year. As our distribution counts continues to compound, we believe there is a there is a big growth opportunity there. You know, uh you’ve added to your modes. You’re now building the distribution muscle as we just spoke about it. Uh how comfortable do you feel about being able to leverage on these new modes that you’ve created for yourself? Our real strength always has been our product and our tech and those I feel very bullish about leveraging because those also remain pieces where Ather is least competed on. On stores, we are catching up with others. And that’s easy growth vector for us, but it’s not a moat. Like if if if I like 4,000 stores and we had 6 700. Yeah, we are getting in the game, right? We are catching up. And that’s amazing because now you will see real scale you are starting to see real scale from Ather. But the reason where Ather stands out consistently and hopefully for a very long time is its stick and is its product. The hopefully our battery packs, our power trains are going to be one of the most reliable in the industry. Our software is going to be the most bug-free. Our experiences are going to be the most magical. As long as this this engine works, everything else can come magically around it, right? Like everything else can be fitted around it. Whether it’s network, store count, service infrastructure, manufacturing capacities, you know, investments in brand building. But this is the core. I’m very clear. You know, as a founder who started this company in 2013 and then and then has then taken it public, you hold what? A little under 6% now? You’re still classified as the promoters, but you hold under 6%. The largest shareholder is Hero. What has this been like? I mean, in a way you’re you’re you’re giving away equity. You’re no longer the largest shareholder. What what has that meant for you emotionally as well? I know. I I think this And most founders go through a very similar journey. Whether it’s our business or the internet businesses or the software businesses. We are in a world where you got to make one of two decisions. Trade off speed for higher ownership. And you may not see the desired outcome in your youth and your life. Uh but you’ll have control. You’ll have ownership rather. Control comes from your ability to execute frankly. Uh or you You it’s okay. Give up ownership. Share share the upside with more and more investors, more and more people. But then you get to see your life’s dream come true while you’re still while you’re still building, right? And and not like, “Oh, my children will run this.” So, I think a lot of us founders have made made that trade-off. And I think we are very lucky that we got this opportunity to make this trade-off. We’re very lucky we had investors like Hero, like NIF, like GIC, like Sachin Bansal, or Nikhil Kamath along this journey. I honestly feel Hero does not get enough public credit for making the kind of investment it did and being able Ather wouldn’t have become this kind of value creator for Hero. Like at $3 million, Hero’s stake is probably worth 8, 9,000 crores now. We wouldn’t have created this value if Hero did not have the foresight to not try and take over. Like actually understand early on that, you know, this is a different business. This needs to be take over? Did you not allow them to take over at Think of the journey. It Hero came in as a 32% shareholder. And over a 9-year journey now, 9 years, they’ve been able to keep their ownership in this horizon. And they’ve actually always been They’ve always said, “Let’s bring in more investors. Let’s bring in financials. Let’s make sure, you know, there are enough investors on this cap table so that you have enough firepower available to to to drive your growth.” And they built their own Vida up. And might I add, very successfully. Hero If Vida is now larger than many of the older older players in the market, right? I think this is incredibly rare to have a legacy company have the foresight to invest, learn from the investment, and be able to ensure that the value creation is so profound. Most most investments wouldn’t land up in this place, honestly. You know, I I want to go back to a very crucial pivotal moment in the two-wheeler EV story for India. and that was a meeting that took place at the NITI Aayog where the startups were there, the incumbents were there. It was a very fiery meeting and that was the time when the government was trying to even consider the possibility of banning ice two-wheelers altogether. Uh in many ways you believe that that was the seminal moment that that really helped push the two-wheeler EV startup story in India? And recount that meeting for us. I can’t go into obviously a lot of details. I believe I was I was there in the meeting and I believe in and I think big boys were there. Yeah, a lot of people were there. Um essentially the government kind of put this challenge on the table that can we build good electric vehicles? Yes or no? And if yes, then why can all of you in the room not build them as fast as possible? Huh. And why should we not do everything to encourage you to do it? Right, three questions essentially. And I think there was a bit of a uh there was a bit of a fight on can we can we build the right kind of EV that the consumer wants? Um some of our startups pushed hard. Um and uh I I think the government was in a really pushy mood that time. I think it was tremendously helpful. It was pivotal because um it did two things. Good for both sides, startups and legacy companies. On the startup side, I I think we got a better connect with policy makers and we were able to impress upon policy makers that you know what, we can build this stuff. This is not so hard. We’ve got the brains here uh and the stars have aligned with the battery prices and the semiconductor environment to do this. So that worked out well to ensure that we had the right ear of the policy makers and this got pushed in the right direction. And I think it worked well for legacy make legacy auto manufacturers because they didn’t like just, you know, stay idle. Yeah. They they they decided, “Okay, if that’s the game, we will also compete. We’ll also play play play play a play a do a good fight here, right? We’ll also be competitive.” And I I think it’s led to some good products by our peers in the industry, TVS, Bajaj, Hero eventually with Vida. I think all of that is fantastic for the ecosystem. See, and I go back to the analogy which is what I use for PLI. There is a train. And I will reverse the logic now. You you need the startups to be the damn engine that will start moving this train forward. Others are not going to go anywhere. Yeah. But you also need the capacities and the capital and the brand equity of the legacy players for an average consumer to also trust. Yeah, you know, we will not try to actually go. Mhm. Right? Mhm. For the country, it’s amazing when both of this comes together. You can’t just have the legacy makers commit to doing electric like it’s happened in Europe because nothing will happen. You you just don’t have enough incentive for them to give up their margins, right? And you just can’t also say startups up killing it because then the average consumer will take too long. And average consumers, I go back to this Desh Ki Dhadkan Hero, Hamara Bajaj like just too braindead, right? Yeah. So, you need both to fire together with a healthy competitive intensity. And I think that meeting was played a role among many others in creating the right kind of competitive spirit. You know, you said Desh Ki Dhadkan and Hamara Bajaj several times during the course of our A lot of respect for brand building. No, no, but you know, do you believe that Ather will be the Desh Ki Dhadkan and Hamara Bajaj equivalent of this generation? I do believe so. I I and I do believe that’s the that the brand opportunity over the next 10-20 years. I think there’s an opportunity to build a great product brand in India. That’s our differentiation and we we will lean into it and I think we have a great shot and we are starting to capitalize on it. If you see a new ads, life is easy on an Ather, right? Ziada mat socho, ether le lo. So, we we’re trying we’re trying to come up with these with these connections. Uh in fact, the big pitch for software last year was technology going mainstream. We we we said we don’t want to do stuff we don’t want to basically launch stuff that’s just too geeky and nerdy. We actually want to launch not features in software that connect with the average customer. That is what will build this brand. So, we do believe there’s a phenomenal opportunity for us to build a very powerful product brand. And with an AI future, as every industry talks about what it’s going to mean, how disruptive it’s going to be, you know, how do you look at AI? Are you using AI? How much of AI using? And what do you see for Acer in an AI era? So, that’s increasingly become a big focus for us over the last 5-6 months. Internally at the company, obviously, that’s gone pretty deep now with development and just using that as as an analyst across the board. Uh but on the product side, we’re starting to see some really large opportunities. And I’ll talk about one pivot that we did do because of AI. Since you don’t do that many pivots. So, there’s one to talk about recent times. We launched smart helmets called Halo a couple of years ago. A lot of excitement, and we were also pretty excited about them. But, at that point, in a pre-AI world, that was conceptualized as a genuine Halo product. Like this really expensive 15,000 rupees smart helmet that’s that’s a great experience, but not really meant for everybody. And it’s okay. But, with LLMs becoming so powerful and now edge models becoming so good, uh and with the kind of work that Sarvam is doing, for example, in India, we we we woke up about 6-9 months or 1 year ago, and we realized that, you know what? We actually need to leverage this in our daily products with every consumer. So, we had a massive pivot here. [snorts] We decided to flip our helmet smart helmet strategy from this amazing super premium niche product to everybody needs to get a smart helmet. Like my ideal attached rate for this product is 100%. Like everybody should get a smart helmet. We need to beat prices down to like 2,000 rupees and make margins selling that hardware at that price because if you got a speaker and a mic on the head of every customer what you can do with it is just very powerful. For example, the most important feature I’m looking forward to is potholes. Pothole detection. We’ve been mapping roads and we’ve been building a massive data repository for a while now. So we know all the potholes and the bad stretches and the poorly designed speed breakers in all our city roads. Now this feature becomes incredibly useful for you as a consumer. It becomes a big safety feature. If you got the smart helmet on your head and the helmet can tell you before you hit that pothole like 100 meters ahead or 50 meters ahead. In Mumbai, Delhi, and Bangalore maybe 10 meters ahead. 10 meters ahead. It can tell you to slow down, you know, because you’re otherwise going to skid at that speed on that pothole. I think it’s a brilliant feature. And we can build this and we can launch this because of partly because of AI, partly because of the data capability that we’re building. Tarun, it’s been an absolute pleasure. We wish you the very best of luck with Ather and and we look forward to hearing more from you about the magical experiences that you hope to create through the course of the year and how you intend to keep cracking the code as well as all your expansion plans. Thanks very much for joining us on Young Turks. Well, we are going to take a break here of this episode of Young Turks Reloaded. As always, keep your feedback coming in. We’d love to hear from you. Till then, from the entire team, thanks very much for watching.