Ather Expands Production Capacity to 11.4 Lakh Units as Q2 Volumes Rise 42%

Ather Energy will invest around ₹122 crore to add 2.25 lakh units of annual production capacity across its Hosur and Chhatrapati Sambhajinagar facilities as electric two-wheeler volumes and customer demand continue to rise.

Ather Energy is expanding its manufacturing capacity as the electric two-wheeler maker reports strong growth in volumes and customer interest during the second quarter of FY27.

The company’s board has approved capital expenditure of approximately ₹122 crore, including taxes, to increase production capacity at its Hosur facility in Tamil Nadu and Factory 3.0 in Chhatrapati Sambhajinagar, Maharashtra.

The expansion will add 2.25 lakh units of annual production capacity, taking Ather’s planned overall capacity to approximately 11.4 lakh units per year by Q2 FY28.

The announcement comes alongside Ather’s Q2 FY27 results, with the company reporting 93,211 units for the quarter ended September 30, 2026, a 42% increase from the year-ago period.

Hosur Capacity to Rise to 4.95 Lakh Units

Ather plans to increase the annual capacity of its Hosur facility from 4.20 lakh units to 4.95 lakh units, adding 75,000 units of annual production capacity.

The company expects this expansion to be completed by December 2026. Up to ₹58 crore has been allocated towards the Hosur expansion.

A significant part of this investment will go towards a new battery line. Ather has earmarked up to ₹53 crore for the line, which is expected to be completed by Q3 FY28.

The company said the additional battery manufacturing capability is intended to support different demand scenarios and reduce supply-chain risks.

Factory 3.0 Expansion Adds 1.5 Lakh Units

Ather will also increase the planned capacity of its Factory 3.0 facility in Chhatrapati Sambhajinagar.

The facility’s annual capacity will rise from the previously planned 5 lakh units to 6.5 lakh units, representing an addition of 1.5 lakh units.

The expansion is expected to be completed by Q2 FY28, with up to ₹64 crore allocated for the investment.

Once both expansions are completed, the two facilities will together provide approximately 11.45 lakh units of annual production capacity.

Q2 Volumes Rise 42%

The capacity expansion comes as Ather’s electric two-wheeler volumes continue to grow.

The company recorded 93,211 units in Q2 FY27, up 42% year on year.

Customer interest also increased during the quarter. Ather reported approximately 10 lakh customer enquiries, representing a 109% year-on-year increase. Pre-orders reached 1.8 lakh, more than double the level recorded a year earlier.

The company also reported that its Hosur facility reached 98% capacity utilisation at peak production.

The combination of higher volumes and high utilisation provides the immediate context for Ather’s decision to add manufacturing capacity.

Rather than relying entirely on its existing production footprint, the company is increasing capacity ahead of the expected ramp-up in demand.

Financial Performance Improves

Ather’s operating performance also improved during the quarter.

Revenue from operations rose to ₹1,464 crore in Q2 FY27, compared with ₹899 crore in the corresponding quarter last year. Consolidated total income increased to ₹1,527 crore from ₹941 crore.

The company reported a consolidated profit after tax of ₹1.26 crore, compared with a loss of ₹154 crore in Q2 FY26 and a loss of ₹51.09 crore in the previous quarter.

EBITDA stood at ₹74.2 crore, with an EBITDA margin of 4.9%. Ather said this marked its second consecutive EBITDA-positive quarter.

The improvement is significant, but the ₹1.26 crore consolidated profit remains small relative to quarterly operating revenue. The result therefore points to an improvement in financial performance rather than, on its own, establishing a sustained profitability trend.

For the first half of FY27, Ather’s consolidated loss stood at ₹49.83 crore, compared with ₹332.30 crore in the corresponding period a year earlier.

Why the Capacity Expansion Matters

The immediate significance of the announcement is the scale-up of Ather’s manufacturing network.

The company is adding capacity at its existing Hosur facility while simultaneously increasing the planned scale of Factory 3.0. Together, the two additions will increase annual production capability by 2.25 lakh units.

The battery-line investment at Hosur is also important because it expands the manufacturing plan beyond final vehicle assembly and gives Ather additional in-house battery production capability.

However, planned capacity should not be treated as equivalent to actual sales. The commercial impact of the expansion will depend on how quickly Ather can convert customer enquiries and pre-orders into deliveries and how effectively the additional capacity is utilised.

For now, the company is expanding at a time when its Q2 volumes have grown 42% year on year and its existing Hosur facility is operating at high utilisation levels.

With the latest investment, Ather is targeting approximately 11.4 lakh units of annual production capacity by Q2 FY28.

The expansion therefore marks a significant increase in the company’s manufacturing scale, while the Q2 results indicate that the capacity addition is being backed by higher volumes, stronger customer interest and improving operating performance.