Why EV maker Ather Energy chose Hosur over Bengaluru for ₹635-cr plant

Sangeetha Chengappa Bengaluru | Updated on February 24, 2021

Vehicle assembly line at Ather Energy’s Hosur plant

Fiscal sops, better logistics and easier access to supplier base tilted the scales: Tarun Mehta, CEO

The decision of Ather Energy, India’s first intelligent electric vehicle manufacturer, to move its ₹635-crore factory from Bengaluru to Hosur was based on fiscal sops, better logistics and easier access to its supplier base, a top executive from the company has said.

The factory is supported by the Government of Tamil Nadu under its EV Policy. The support includes reimbursement of SGST on electric vehicle manufacturing; capital subsidy for battery manufacturing; employment incentive in terms of reimbursement of EPF for a period of one year; exemption from payment of Electricity Tax till 2025 and 100 per cent stamp duty exemption, said Tarun Mehta, co-founder and CEO, Ather Energy.

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Faster access

He said, given that this is the company’s first large set-up, they wanted to keep the plant within comfortable driving distance of the head office located near Dairy Circle, Koramangala.

“An engineer should be able to get out of the office and be at the plant in 60-90 minutes. It takes 70 minutes to get to the Hosur plant, which is 45 km away. We can literally get out of office and within five minutes we are on the Electronics City flyover, and it’s a straight road thereafter to the plant. Contrast this with our plant in Whitefield, Bengaluru, which is just 20 km away from our head office but takes 105 minutes to get to, because we are cutting through the city to get there.”

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Another reason for the move to Hosur is that a significant chunk of the company’s suppliers is already based in Hosur. “We were also able to move some of our Tier-2 suppliers, who make small components for us, to Hosur. So, that also played a big part for us to move here,” said Mehta.

With capacity to produce 1,10,000 scooters annually, the plant will serve as Ather Energy’s national manufacturing hub, catering to demand from across the country. This is nearly 10 times the capacity of the Whitefield, Bengaluru, plant. The company has already invested ₹130 crore in phase 1 of its plant, which is part of the total investment commitment of ₹635 crore over the next five years.

“There is an additional 2.5 lakh sq ft of land which we will most likely take up in the next two years, once the existing capacity is fully utilised. We will extend the plant into a 4-lakh sq ft capacity in phase 2,” said Mehta.

Lithium-ion battery

Besides EV manufacturing, the plant will also focus on lithium-ion battery manufacturing, which is a key focus area for the company, going ahead. The plant currently employs 300-plus people and is expected to generate 4,000 direct and indirect jobs in the next five years. The Ather 450X and Ather 450 Plus are completely made in India — designed in Bengaluru. Ather has confirmed deliveries and presence across 27 cities in 15 States and is likely to expand to 40 cities by the end of 2021.

Published on February 24, 2021

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