Ather Energy, the Indian electric scooter manufacturer, has announced a widened loss for the financial year 2021-22, citing increased expenses that surpassed revenue growth. The company reported a loss of Rs 344.1 crore for the fiscal year ending March 31, 2022, significantly higher than the loss of Rs 233.3 crore incurred in FY21. Although Ather experienced remarkable revenue growth, generating a total income of Rs 413.9 crore compared to Rs 83.3 crore in FY21, its expenses surged to Rs 718.2 crore in FY22, marking a 2.4X increase.
The substantial rise in expenses was attributed primarily to the cost of materials consumed, which includes expenses related to raw materials and components used in production. Despite supply constraints on essential components that impacted the electric vehicle sector from 2020 to 2022, Ather managed to boost its sales significantly. However, the Bengaluru-based startup acknowledged that it could only fulfill approximately 50% of the total orders it received during the fiscal year.
Notably, Ather implemented a strategic shift in its business model, transitioning from directly owning its experience centers to adopting a dealership model. This shift was driven by the need for cost-saving measures and a desire to accelerate expansion. It marked a departure from the traditional direct-to-consumer (D2C) model that both Ather Energy and Ola Electric had previously operated. Presently, 31 out of Ather's 34 experience centers are managed by dealers, reflecting the company's commitment to this new approach.
Despite the challenges faced in FY22, Ather Energy is optimistic about the future. The company foresees positive momentum for FY23, citing a healthy and stable cost structure and brand strengths as key advantages. However, it anticipates potential supply chain challenges in the areas of battery cells and chips. Ather Energy's primary competitor, Ola Electric, also reported a widened loss of Rs 784.15 crore for FY22, despite an annual revenue of Rs 456.26 crore.
Both Ather Energy and Ola Electric have yet to release their FY23 financial results. Recently, Ather Energy announced a successful fundraise of Rs 900 crore through a rights issue from existing shareholders, including Hero MotoCorp and Singapore's state investor, GIC.
The electric vehicle sector in India is witnessing significant growth and competition, with Ather Energy striving to navigate challenges and capitalize on opportunities in this dynamic market.
Ather Energy's FY22 financial results reflect the complex dynamics of the electric vehicle industry in India, marked by strong revenue growth and increased expenses. The company's strategic shift to a dealership model and its positive outlook for FY23 demonstrate its commitment to achieving sustainable growth in a competitive market.ather 450x Gen 3 price 144929.
