While building Ather Energy back in 2013, Tarun Mehta found out customers who had already bought electric vehicles loved the technology but hated the product. That is where Tarun and his partner decided to not only make removable batteries for EVs but also build the vehicle itself.
Fast forward to 2018, when Ather Energy launched its first electric scooter, Tarun observed that customers were then “walking in [to EV stores] expecting to be wowed by electric”. Today, India’s EV landscape has changed again as the two-wheeler incumbents are gradually walking up to the rising popularity.
And Tarun believes that numerous opportunities are lurking in the EV space given the rapidly changing customer behaviour.
Changing customer behaviour over the years
During the early stages, Tarun realised that there was a unique opportunity in the EV space where “people are already bought into the technology but they hated the product, which is usually the other way around”.
So, Ather was basically stepping into a domain where customers were ready to buy the product, the technology was out there, but the engineering needed fixing.
As the noise around EVs started amplifying over the years, customers brought a new set of expectations to the EV market. Tarun said, “There have been two changes. First, we saw in 2018 when we launched, by then, enough people had heard about electric. [And two], they are expecting electric to be an upgrade for them. People have started to make a one-to-one correlation. New tech means electric, electric-upgrade-electric-fancy”.
These two aspects, he believes, have changed customer expectations completely.
Changing customer behaviour based on geography
One would expect that the Tier I demand for electric vehicles would be greater than Tier II demand but Tarun revealed that they saw the opposite with Ather Energy.
“What’s happening is, there is a lot of aspirations that exist in Tier II and III towns but not good products. Second thing, charging infrastructure. It’s super easy to install charging points outside the top 10 cities in India,” said Tarun.
He also pointed out that the way service is delivered and how people’s ownership model ends will play key roles in deciding customer behaviour around EVs going forward, both in big cities and small towns.
Tarun explained that the change of vehicle ownership is a complex process and if EV manufacturers can nail that, huge opportunities should come to these brands, provided they can fix the broken vehicle servicing chain as well.
The rise of the incumbents
Two-wheeler incumbents like Bajaj and TVS will eventually start playing in the field and Tarun respects the market share and customer demands these brands have. But he thinks that “the world [has] changed. Electric vehicles have different business models. The old model of integration and supplier-driven innovation does not scale very well to electric vehicles.”
He emphasises that electric vehicles require you to rethink the product completely. Enterprises must have a strong product and engineering capability.
And incumbents might be slow to turn their supply-driven business models around to fit the demands of EVs and customers will have to rely on the new players like Ather Energy for now for innovative vehicles and features.
How can students start thinking on entrepreneurial lines?
Tarun’s own journey has been similar where he started thinking about Ather Energy while still in IIT Madras. He advised that aspiring students should make full use of their college infrastructure if they wish to build something.
And Tarun said to “eventually have some philosophies of your own. What kind of culture? How do you build things? What really excites you”. He then went on to explain how college is where you can find a business partner who can sync with you and you can test the waters of working together during those 4-5 years in college.
To know more listen to the podcast here.
Timestamps:
01:50 – Ather Energy’s founding story
07:45 – Customer discovery: Loved the tech; hated the product
09:30 – How to think about entrepreneurship as a student
15:00 – Opportunities for entrepreneurs in the EV space
18:40 – Working with the government
24:30 – Supply chain in India: IC Vs EV
31:15 – Working with coaches and advisors as a founder
