Ather Energy's latest earnings call showed a sharp mismatch between demand and supply, with the electric scooter maker's monthly pre-orders crossing 50,000 while its existing capacity remains well below that level. The company is now accelerating capacity expansion, preparing for a new lower-priced scooter and raising fresh capital to support the next phase of growth.

Ather said it was receiving more than 50,000 pre-orders a month, compared with around 30,000 units retailed monthly in the first quarter. Based on this demand, management estimates it could have sold another 13,000-15,000 units per month if supply was available.

The supply constraint is also visible at the retail level. Dealer inventory has fallen from around 14 days to just three days, while existing stores are currently fulfilling only 50-60% of demand. Some dealers have stopped taking fresh bookings as waiting periods have stretched to two months or more.

Ather currently has annual production capacity of around 4.2 lakh units, with its Hosur facility capable of producing about 35,000 scooters a month. The company expects the first phase of its AURIC facility to take total annual capacity to 9.2 lakh units later this calendar year.

The company is also evaluating the second phase of AURIC, which could add another 5 lakh units of annual capacity and take the total to 14.2 lakh units. However, Ather has not started investments in Phase 2 and expects to provide more clarity over the next one or two quarters.

To fund this expansion, Ather recently completed a Rs 1,300 crore QIP and is seeking shareholder approval for another Rs 1,200 crore preference issue. The planned Rs 2,500 crore fundraise will be used to accelerate capacity at Ather and its suppliers, support new product launches and strengthen the balance sheet amid commodity and supply pressures.

The upcoming lower-priced EL scooter will be another key capacity driver. Ather plans to build capacity for around 60,000 EL units per month across Hosur and AURIC. The company expects the scooter to initially have a stronger focus on northern and middle India, where management sees demand for more affordable variants.

Interestingly, Ather expects at least 75% of EL buyers to opt for AtherStack Pro, despite the scooter's lower price point. Management also expects EL to compete more directly with Rizta than with the 450, although it could eventually build Rizta on the EL platform if demand warrants it.

Beyond scooters, Ather is building a second revenue stream. Non-vehicle revenue now accounts for 14% of operating revenue, with AtherStack Pro the largest contributor. Management said service revenue could offer a larger opportunity over time, noting that established two-wheeler companies generate around 10-12% of revenue from services, compared with Ather's current 2-3%.

With demand running ahead of production, the immediate challenge for Ather is no longer just generating demand but converting existing demand into deliveries. The company's next phase will depend on how quickly it can add capacity, ramp up EL and improve its non-vehicle revenue mix.