Synopsis: Shares of this EV stock jumped over 6% as it plans to cut aluminium use via its new EL platform, aiming to reduce costs, ease margin pressure, and boost profitability without raising prices amid rising raw material costs.
The shares of this Indian electric two-wheeler (E2W) company engaged in the design, development, and in-house assembly of electric scooters, battery packs, charging infrastructure, and supporting software systems are in the spotlight after it rose by 6% after the company plans to cut aluminium use to ease costs.
With a market capitalisation of Rs. 34,804 cr, the shares of Ather Energy Ltd were trading at Rs. 909 per share, surging over 6% in today’s market session, making a high of Rs. 914.50, up from its previous close of Rs. 863.45 per share.
Strategic Shift to Alternative Materials
Ather Energy is currently redesigning its engineering strategy to significantly reduce its reliance on aluminium. For years, the brand has been known for its premium all-aluminium frames, but a global shortage and supply chain disruptions in the Strait of Hormuz have sent domestic prices soaring by approximately ₹45 per kg.
To counter this, the company is developing the EL platform, which aims to cut the total weight of aluminium used per vehicle by 10–15% through the use of high-strength alloys and lower-cost composites for non-critical components.
Combatting Margin Pressure
The move comes as a direct response to a margin squeeze caused by volatile commodity prices. While battery costs have stabilised, the cost of raw materials for the chassis including aluminium, copper, and noble metals, has become a hurdle for profitability.
Ather has targeted a 1,400 basis point improvement in EBITDA for FY26. By increasing the intake of recycled aluminium, which is more cost-effective and sustainable, the company hopes to achieve a 10–20% reduction in engineering costs to protect its bottom line.
Pricing and Market Expansion
Despite the rising costs, Ather’s management has noted that they cannot fully pass these expenses onto consumers without affecting demand. Instead of aggressive price hikes, the company is leaning on operational leverage.
By expanding its retail footprint to 700 stores, Ather aims to spread its fixed costs over much higher sales volumes. This strategy appears to be working, as their national market share recently reached 18.7%, largely bolstered by the successful launch of the Rizta family scooter.
Ather Energy is a Bengaluru-based electric vehicle company, focused on designing and manufacturing smart electric scooters like the 450 series and Rizta. Known for its strong in-house R&D, software integration, and charging network (Ather Grid), the company targets premium and family EV segments while expanding its retail footprint and working toward profitability.
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