Ather Defers INR 26 Cr Incentive Submission Claims

SUMMARY

Ather said that it deviated from the manufacturing guidelines prescribed under the PM E-DRIVE scheme and PMP due to the ban on exports of certain categories of heavy rare earth magnets by China

The company said that it is currently in discussions with the heavy industries ministry for a temporary exemption from domestic fitment of magnets under PMP requirements

The company said it has developed a heavy rare earth-free motor and has also received a CMVR certificate from the Automotive Research Association of India for the same

Two-wheeler EV maker Ather Energy has decided to defer the submission of claims for demand incentives to the tune of INR 26.2 Cr (about $3 Mn) under the Centre’s PM E-DRIVE scheme due to rare earth magnet shortage.

In an exchange filing, the company said it deviated from the manufacturing guidelines prescribed under the PM E-DRIVE scheme and the Phased Manufacturing Program (PMP) due to the ban on exports of certain categories of heavy rare earth magnets by China.

Ather said that due to the problem which was beyond its control, the company, through its motor suppliers, had to make temporary adjustments and deviations from PMP guidelines in the manufacturing process for traction motors, specifically concerning the domestic fitment of magnets.

“While this is a temporary change, it may affect Ather’s ability to submit demand incentive claims for a maximum of 52,500 vehicles manufactured and/or to be manufactured under the PM E-DRIVE scheme,” the filing said.

The company said that it is currently in discussions with the heavy industries ministry for a temporary exemption from domestic fitment of magnets under PMP requirements. Hence, it has decided to defer the submission of claims for the incentives until a definitive approval is received from the ministry.

To prevent the recurrence of such a situation in the future, Ather said it has developed a heavy rare earth-free motor and has also received a CMVR certificate from the Automotive Research Association of India (ARAI) for the same. It added that it has started receiving the PM E-DRIVE eligibility certificate for heavy rare earth-free motors of its different models.

Notably, China’s restrictions on the export of rare earth magnets impacted the wider automotive industry over the past couple of months. In fact, Bajaj Auto MD Rajiv Bajaj had said that the company was considering the possibility of zero sales in August due to the rare earth magnet supply issue. However, Bajaj said in the last week of August that the situation had improved.

According to the PMP and PM E-DRIVE guidelines, EV OEMs need to carry out fitment of a magnet for the traction motor domestically.

Under the PM E-DRIVE scheme, EV two-wheeler manufacturers can apply for production linked incentives up to INR 5,000 per KW.

Earlier this month, Ather’s rival Ola Electric reportedly filed for an INR 400 Cr claim under the central government’s production-linked incentive (PLI) scheme for FY25. The Bhavish Aggarwal-led company also claimed to have developed a rare earth-free motor for its EVs.

Ather’s two-wheeler EV registrations in September stand at 12,573 units to date, as per Vahan data. In August, the company sold 17,856 units.

On the financial front, Ather managed to trim its net loss by 3% to INR 178.2 Cr in Q1 FY26 from INR 182.9 Cr loss it incurred in the same quarter previous year. Its top line jumped 79% to INR 644.6 Cr during the quarter from the INR 360.5 Cr in Q1 FY25.

At 14:25, shares of Ather were trading 3.08% lower at INR 539.75 on the BSE.