The phasing out of subsidy on electric two-wheelers under the PM E-DRIVE scheme by the end of the ongoing financial year is no longer a big concern for Ather Energy, according to the company’s co-founder and CEO Tarun Mehta.
“We have seen a very good success on our ability to raise prices in our strong markets. We have been able to undertake constant price hikes with good response from the market,” Mehta said in an analyst call after the electric two-wheeler maker announced its second-quarter earnings.
“The upcoming subsidy removal is no longer a big concern. Our business is very well set up to absorb that,” he said.
The PM E-Drive scheme began with an incentive of ₹5,000 per kWh for electric two-wheelers in October last year and a cap of ₹10,000 per vehicle. The subsidy was halved to ₹2,500 per kWh for FY26.
“As we go through the final set of subsidy removal, there are a lot of positive tailwinds on the revenue front. On the variable cost front, we have seen strong improvements in warranty costs, bill of materials, the shift to LFP (Lithium Iron Phosphate) batteries is paying off,” Mehta added.
Ather Energy pipped Bhavish Aggarwal-led Ola Electric to emerge as the third-biggest electric two-wheeler maker in October 2025. Ather Energy recorded sales of 28,219 units as against 16,037 units sold by Ola, according to data sourced from the government’s VAHAN portal.
India’s electric vehicle industry faced supply constraints this fiscal as China imposed curbs on exports of rare earth magnets.
Despite the rare earth crisis and the GST rate cut on internal-combustion engine (ICE) vehicles, the electric two-wheeler industry is showing quite a strong bit of resistance and will grow, said Mehta.
The Ather Energy CEO said that the electric scooter industry is moving towards products priced over ₹1 lakh.
“The kind of volumes that we were seeing in the sub-₹1 lakh segment was not fundamental. A lot of it was pushed growth as opposed to organic growth. We have seen very strong signs of a lot of that market shrinking as most of the industry is starting to migrate to beyond ₹1 lakh price points. If you see the growth in north of 1 lakh segment, that has been very powerful,” he said.
On the government’s plan to make anti-lock braking systems (ABS) mandatory for two-wheelers from January 2026, Mehta said, “We are not a big fan of mandating things. A lot of these things should happen organically. Consumers are demanding more and more safety. I think the market will reward better safety products. If ABS is mandated, we are prepared for it. Our entire portfolio has front disc brake. So some of the cost that would increase because of ABS is not a challenge, limiting the cost increase to the ABS module.
