Ather Approves 11.4 Lakh-Unit Annual Capacity by Q2 FY28

Ather Energy Limited has approved an expansion to 11.4 lakh units of annual installed capacity by Q2 FY28, after management estimated that roughly 20,000 monthly retail units were unrealised. Ather will add 6,000 units of monthly capacity at Hosur and 12,000 units at AURIC Phase 1, alongside its new plant ramp-up.

Why is Ather expanding manufacturing capacity?

Ather is expanding because management said demand from its current stores was already in the 50,000-to-60,000-unit monthly range, against average manufacturing capacity of 33,000 units a month in Q2 FY27. Management estimated about 20,000 retail units a month were not being captured because supply was insufficient.

Demand indicators grew faster than wholesale volumes in Q2 FY27. Inquiries rose 109% year on year to more than 10 lakh, while preorders increased 108% to about 1.8 lakh. Wholesale volume increased 42% to 93,000 units from 65,000 units a year earlier, and registrations rose nearly 60% to 92,500 units from 57,000 units.

Ather’s capacity had increased from an average 28,000 units a month in the prior quarter to 33,000 units in Q2 FY27. However, management said Hosur was already at its existing 35,000-unit monthly limit, making the new additions necessary rather than waiting for AURIC Phase 1 alone to stabilise.

How will Ather reach 11.4 lakh units of annual capacity?

Ather will reach 11.4 lakh units by expanding both its operating Hosur factory and AURIC Phase 1 in Chhatrapati Sambhaji Nagar. The 6,000-unit monthly Hosur addition is due later in Q2 FY27, while AURIC Phase 1 will receive an additional 12,000 units of monthly capacity by Q2 FY28.

Before the latest approval, Hosur’s 35,000-unit monthly capacity and AURIC’s planned 42,000 units would have given Ather 77,000 units a month, or 9.2 lakh units annually. The approved additions lift monthly installed capacity by 18,000 units to 95,000 units and annual installed capacity by 2.2 lakh units to 11.4 lakh.

AURIC Phase 1 is scheduled to begin trial production in Q3 FY27, with capital-expenditure installation and capacity installation expected to finish by Q4 FY27. Management said the base 42,000-unit monthly capacity would take two quarters to ramp up, while it expected the additional 12,000 units to ramp within FY28 without specifying an exact month.

What demand is supporting Ather’s capacity addition?

Ather said the expansion reflects rising demand, including the initial rollout of Konarc, its mainstream scooter launched at Ather Community Day 2026. Konarc recorded only one month of sales in Q2 FY27, September, and fewer than 10,000 units had been sold by quarter-end, according to management.

Management said inquiries, preorders and store walk-ins rose several times in early Konarc markets, including Rajasthan and Uttar Pradesh. Ather initially released Konarc in Uttar Pradesh and Rajasthan, then expanded to Madhya Pradesh, Bihar, Maharashtra, Gujarat and Punjab, with southern-market availability planned as AURIC comes online over the next few months.

The company also reported broader electric two-wheeler growth across regions. Industry registrations rose 82% year on year to about 6 lakh units in Q2 FY27, while quarterly electric two-wheeler penetration reached 11.2%. Growth was 82% in South India, 85% in Middle India and 79% in Rest of India, compared with 82%, 66% and 54%, respectively, in the previous quarter.

What will the expansion mean for Ather’s sales?

Ather expects the new capacity to reduce supply constraints and create room for growth over the next couple of years, but management did not provide a sales-volume or revenue target. Management said capacity had become tight in recent months as demand exceeded supply, particularly after Konarc’s phased launch.

The Hosur addition should affect production first because it is being installed at an existing factory. Management said the 6,000-unit monthly increase would be available later in Q2 FY27, with the impact on daily output expected from the end of that quarter.

AURIC will have a longer path to realised output despite its Q4 FY27 installation target. Management said its original 42,000-unit monthly capacity would certainly need two quarters to ramp, and the further 12,000-unit addition scheduled for Q2 FY28 could ramp faster. The 11.4 lakh-unit target is therefore installed capacity, not a forecast of production in Q2 FY28.

How does capacity expansion affect Ather’s pricing and margins?

Ather said it did not intend to take further price hikes in Q3 FY27 and wanted to preserve flexibility to grow without discounts as capacity becomes available. Its weighted average ex-showroom price, including Pro Pack sales, was Rs 1.64 lakh in Q2 FY27, up Rs 14,000 from Rs 1.50 lakh in Q4 FY26.

Management said the higher average price reflected price increases, product configuration management and incentive management. It also said Konarc had a more aggressive entry portfolio and better current unit economics than Rizta, which could allow Ather to offer more affordable products without necessarily reducing absolute gross margins.

Ather reported adjusted gross margin of 24% in Q2 FY27, 1.6 percentage points above Q1 FY27. Management said structural price and cost actions had improved gross margin by 5.3 percentage points versus Q4 FY26, while commodity inflation reduced it by 9.4 percentage points and stock-keeping unit management added 2.7 percentage points.

Management described the 2.7-percentage-point benefit as a lever rather than a one-off item. It said the lever could remain relevant if supply-demand imbalance persists or commodity costs stay elevated, but it could be eased if those conditions change. Management also said subsidy levels were broadly unchanged in Q2 FY27, apart from a few hundred rupees of variation between variants.

Conclusion

Ather’s approval raises its installed-capacity path from 9.2 lakh to 11.4 lakh annual units by Q2 FY28, combining a near-term Hosur addition with a larger AURIC expansion. The decision follows 109% growth in inquiries, 108% growth in preorders and management’s estimate of roughly 20,000 unrealised retail units each month.

The next disclosed milestones are AURIC trial production in Q3 FY27, completion of its capacity installation in Q4 FY27 and the rollout of additional Konarc variants over the next couple of quarters. Investors and customers will also be able to track how quickly the 42,000-unit monthly AURIC base capacity ramps and whether the additional 12,000 units are realised within FY28, as management expects.