Ather Energy, one of India’s leading electric two-wheeler innovators, has announced the deferment of ₹26.25 crore worth of government incentive claims under the PM E-DRIVE scheme. The decision comes after an unexpected supply shock in the rare earth magnet market—a critical input for EV traction motors—that has impacted over 52,000 Ather vehicles manufactured or scheduled for production.
The Root Cause: Rare Earth Supply Chain Disruption
China’s recent export restriction on heavy rare earth magnets has disrupted global supply chains, creating a ripple effect for manufacturers worldwide. For Ather, this meant:
- Immediate shortages of heavy rare earth magnets used in its traction motors
- Forced temporary changes in manufacturing processes
- An unavoidable, short-term deviation from the Phased Manufacturing Program (PMP) that mandates domestic sourcing of key components
This supply interruption left Ather temporarily unable to comply fully with the government’s incentive guidelines across a significant batch of vehicles.
Scope of the Impact
The current challenge affects both production and financial planning for Ather. Key numbers include:
- ₹26.25 crore in incentive claims now put on hold
- Up to 52,500 vehicles either built or planned under the scope of the PM E-DRIVE policy
- Uncertainty around when normal supply and full compliance will resume
Ather has proactively engaged with the Ministry of Heavy Industries to seek a temporary exemption to the domestic fitment requirement until the supply situation normalizes.
Innovation in Adversity: The HREF Motor Solution
Turning a supply crisis into an innovation opportunity, Ather’s engineering team fast-tracked the development of a new Heavy Rare Earth Free (HREF) motor. Important milestones include:
- Securing type approval from the Automotive Research Association of India (ARAI) for the new HREF motor design
- Beginning to receive PM E-DRIVE eligibility certificates for multiple models equipped with these motors
- Reinforcing the company’s long-term commitment to the Make in India initiative
This breakthrough not only enables Ather to adapt quickly but also promises a more resilient, locally-sourced supply chain in the future.
A Responsible and Forward-Looking Approach
Ather Energy’s decision to defer claiming government incentives reflects its commitment to transparency and regulatory integrity. Rather than rushing unsupported claims, the company is awaiting clear approval on its temporary deviation. The brand remains steadfast in its focus on:
- Full guideline compliance as soon as possible
- Open communication with stakeholders and authorities
- Supporting sustainable, local manufacturing even under tough market conditions
Outlook for Stakeholders
While Ather’s stock price saw a brief dip after the announcement, market confidence remains buoyed by the company’s transparency and rapid engineering response. Long-term investors recognize:
- Short-term incentive disruption, but stable product innovation pipeline
- Continued leadership in domestic EV technology and manufacturing
- Strengthened ability to weather global supply shocks
Final Thoughts
This episode highlights the evolving challenges of global supply chains and the agility required of India’s EV leaders. By doubling down on innovation, clear governance, and collaborative problem-solving, Ather Energy is not just managing a crisis—it is setting new standards for resilience and responsible EV growth in India.
