Ather Energy seeks 2-3% RDI loans as PLI stalls in FY26

What Ather is planning now

Ather Energy is finalising its participation in the government’s research, development, and innovation (RDI) scheme, according to three people aware of the matter. The decision is aimed at securing low-cost, long-term debt funding for projects linked to research and development. The move is significant for Ather because its inclusion under the production-linked incentive (PLI) scheme for automobiles remains stalled. With rivals continuing to receive PLI-linked benefits, Ather is looking for alternative financing avenues to fund product and platform expansion.

The company is finalising the term sheet for the loan facility. The proposed facility is expected to provide working capital for R&D. Disbursements under the RDI funding are described as milestone-linked, tied to projects that have already been approved under the scheme.

How the RDI funding is structured

The RDI scheme being discussed is a ₹1-trillion programme, which is ₹100,000 crore. Under this route, the funding Ather is finalising features interest rates as low as 2-3%. The loans are described as long-term debt, designed to support projects with clear development milestones.

For an EV manufacturer, low-interest debt can reduce financing pressure during periods of heavy product development and investment. In Ather’s case, the RDI line is positioned as a way to bankroll upcoming electric motorcycle and EL platforms, according to the information provided.

Why the funding matters while PLI access is uncertain

Ather’s attempt to secure RDI debt comes at a time when it remains outside the PLI auto scheme. The company is effectively trying to fill a funding gap created by the lack of incentive-linked support that some competitors continue to benefit from.

The PLI auto scheme is sized at ₹25,938 crore. Rivals such as TVS Motor, Bajaj Auto and Ola Electric are cited as continuing to benefit from incentives under this PLI framework, intensifying competition in the electric two-wheeler market. With incentives linked to production and investment, the PLI scheme can meaningfully alter cost structures across players that qualify.

The eligibility thresholds that keep startups out

A key issue highlighted is the entry criteria for the PLI auto scheme. Stiff thresholds such as ₹10,000 crore in revenue for auto companies and ₹1,000 crore net worth for non-auto firms have excluded companies such as Ather Energy.

In a separate government explanation referenced in the material, the PLI scheme is described as designed for “global champions”, not startups. That view is linked to additional thresholds mentioned, including ₹10,000 crore in revenue and ₹3,000 crore in fixed assets. The net effect, as described, is that electric-first companies and most EV startups such as Ather Energy, River and Euler Motors remain outside the scheme’s ambit.

Tarun Mehta’s pushback on the PLI design

Ather Energy CEO Tarun Mehta has criticised the current PLI framework for excluding EV-first startups due to rigid financial eligibility conditions. Mehta has argued that such design choices leave emerging EV makers at a cost disadvantage versus companies that qualify for incentives.

He has also warned that exclusion can create a structural disadvantage, with some estimates putting the cost gap between PLI beneficiaries and non-beneficiaries at 13-16%. The argument is that a policy intended to support localisation and manufacturing could end up reinforcing incumbent advantages if eligibility is primarily based on legacy scale.

Ather’s investment claims and capacity plans

Mehta has pointed to Ather’s investments in R&D and manufacturing as evidence that electric-first companies contribute to capacity creation and localisation. The material references “thousands of crores” of investments in R&D and manufacturing, more than 4,000 direct jobs, and a planned ₹2,000 crore greenfield facility in Maharashtra.

Separately, Ather’s total capex over more than a decade of operations is stated to be under $100 million. The company was founded in 2013 and is described as having shipped its first product five years later. The text also states Ather reached unicorn status and IPO’d in 2025.

R&D spending and overseas market exploration

On research spending, the material states that in FY25 Ather spent ₹340-350 crore in R&D. In the first half of FY26, it has already invested ₹210 crore. The company has also said it is exploring traditional EV markets, including Southeast Asia and Latin America.

The text notes that a few years ago, compliance was a major issue due to unclear regulations and changing state-level incentives. With subsidies ending, the company says compliance has become easier, as the operating environment has become clearer on incentives.

Pricing, subsidies, and the push for lower-cost offerings

Ather’s CEO has linked policy support to the ability to launch lower-priced products in mass-market segments. The material cites a past example where, at a scooter price of ₹1,65,000, the company was “barely not losing money at a material level”, and that was possible because the government provided ₹60,000 in subsidies at that time.

Beyond pricing, Ather also announced consumer-facing initiatives intended to reduce upfront costs and improve ownership confidence. These include a Battery as a Service model that it says can reduce upfront costs by 30%. Under this model, customers pay ₹1 per kilometre for battery usage, with a minimum monthly usage of 1,000 kilometres. The company also mentioned an assured buyback programme offering up to 60% value after three years and an enhanced comprehensive warranty covering critical components for up to five years or 60,000 km.

Key schemes, thresholds, and numbers

Funding and valuation references

The material also includes two funding references for Ather. One says Ather raised $128 million led by National Investment and Infrastructure Fund (NIIF) and existing investor Hero MotoCorp. Another says Ather raised ₹600 crore (about $11 million), which boosted its valuation to $1.3 billion, or about ₹10,900 crore.

These data points are presented as part of the company’s broader funding and scale-up context alongside the current effort to line up low-cost RDI debt.

What investors will watch next

The immediate milestone to watch is Ather’s completion of the term sheet and formal participation in the RDI scheme, since access to 2-3% long-term debt could shape how it funds R&D-heavy projects. Investors will also track any movement on the PLI scheme debate, given the company’s public criticism of eligibility design and the cited 13-16% cost gap. On operations, Ather’s FY26 R&D pace and progress on planned capacity additions, including the ₹2,000 crore Maharashtra greenfield facility, remain key signposts highlighted in the information provided.