The chief business officer at Ather talks about the electric scooter ecosystem in India, the target audience and expansion plans.
The sales of electric scooters in India is set to grow from 152,000 units in 2019 to over 10 lakh units in 2025, at a 57.9 per cent CAGR between 2020 and 2025, according to reports. Currently, Okinawa sells just over 10,000 units and is the best-selling brand in the country, followed by Hero. However, the Indian company Ather Energy is fast-expanding and catching up.
By the end of FY22, Ather intends to be in more than 50 cities across the country. Ravneet S. Phokela, chief business officer, Ather, says that the company feels it can sell up to 60,000 units in the next financial year. That would mean a close to 30X jump if compared with the units sold by the company last year.
Phokela, a former marketing director at Nokia,joined Ather from Flipkart in 2015. In an interview with afaqs!, he speaks about the electric scooter ecosystem in India, Ather's target audience and expansion plans.
So far, Ather scooters have been selling in Bengalure, Pune and Chennai. Why are sales limited to these three cities only?
The fact we are strong in southern India and Pune is not because that is where the maximum demand is. We will be in 25 cities in 3-4 months. In the east, we will be in Siliguri and Kolkata (in West Bengal). Then, we will be in the north, as well as the west (in Jaipur).
We see demand all across the country. There are a few cities that are more open to new things, like Bengaluru, Pune and Hyderabad. But, other than that, it is not a regional phenomenon.
What will drive the demand for electric scooters in the rest of the country?
... The question, I think, is what will drive volume in this market. The answer is, credible supply. If a person has to switch to an electric vehicle, then it should at least be equal to, or better than, their existing vehicle.
If it is a scooter with a top speed of, say, 25-30 km/hr that you can't ride on a flyover, then why would someone buy it? Nobody wants to downgrade in life. Also, when you look at petrol, for every Rs 5,000 price gap, there are at least 10 options. What are the options as far as electric scooters go, today?
Who will buy electric scooters? First-time buyers or those looking to upgrade?
We are targeting the premium 125cc scooter market. We don't expect people to buy Ather products if they don't already have a scooter. A small minority will do that.
Looking at our own customer base in the last two years, they would have gone with a good 125cc scooter if they hadn't bought Ather scooters. These are the people who understand that it is not just a switch from petrol to electric. But they actually understand that it is an upgrade.
You didn't mention the environmentally conscious lot as your target group...
We don't believe that our primary audience is environmentally conscious and want to save the world. That is an advantage, but not the primary motivation. Also, while it is economical to run an electric scooter, the ones going after 'economy' are not Ather's primary audience. Why would one buy the most expensive product in the market just to save fuel money?
Clearly, it defines our target audience, which is more discerning, understands the value we deliver, and is willing to upgrade. Sixty-five per cent of the scooters in India are bought on some kind of finance, whereas 80 per cent of our sales come from people paying the money upfront.
When you say the value you deliver, how do you evaluate…
Let's first evaluate the scooter as a normal scooter. Not an electric scooter or one from a start-up. What all will you consider? You will consider speed, acceleration, handling, brake, maintenance... these are the parameters people have been forever evaluating scooters on.
Our top speed is 80-85 (km/hr) and people have touched 90 as well. The critical part, which is the acceleration, 0-40 (km/hr) of 3.03 (seconds), is the fastest in India among all the scooters, including those running on petrol. Then the balance, which is like a sports bike and, therefore, won't swirl. Then there are features that other scooters can't provide, like preemptive diagnostics and our capacity to update the vehicle.
What do you mean when you say the capacity to update?
Normally, when you buy a vehicle, it is the best that you will get. But we can update and push a new feature. It means people today will have more features than they had six months back when they bought the vehicle.
For example, a customer mentioned to us that the dashboard is too bright and is distracting at night. We had to make it bright, otherwise it won't be visible when a customer is riding under the sun. Based on the feedback, we immediately acted and added a dark mode feature. Fundamentally, it is a game-changer, that we are able to add more functionalities.
What about charging? It still remains a challenge…
The thing about charging is mental anxiety. It is not a real issue. This perception issue is our issue to solve. What we will do is, solve charging at two levels. One, we will install charging point at the customer's house before the product is delivered. Two, there are these fast public charging points (15 km/10 minutes).
Globally, 74 per cent of all charging happens overnight at home. Twenty-two per cent happens in offices and only four per cent happens at public charging points. We have a free charging point in Bengaluru...
So, they are not for long rides?
Scooters are more of a utility purchase. People don't go on Sunday morning ride on a scooter. That is a bike, or a car, phenomenon. In any large city, on an average, people travel around 30 km/day on a scooter. Ather products give about 85 km/charge.
You must be encountering questions related to charging…
The questions related to charging are asked each time we go to a new city. Can this give a range of 150-200 km/charge? We had some questions like these in Bengaluru and Chennai when wehad launched there. But once people started riding, these questions disappeared.
Today, we don't get these questions at all. My understanding is that these questions will come our way in the first three months in any new city we go to. We must answer them well enough so that they don't come in the way of our sales.
How do you look at the market? What share of the electric scooter market would you like to have?
I look at it as the overall scooter market share and not just the EV market share. We feel that over time, the entire scooter market will become 'electric'. We want to have a sizeable share of the overall scooter market.
Any number that you have in mind?
We are looking at selling 60,000-65,000 units in the coming year, which is a huge leap from where we are. In FY22, we intend to be in 50 cities. Unlike Bengaluru and Chennai, where we have opened our own retail, in other cities, we are going with the traditional dealer-partner model.