New Delhi: Ather Energy is finalising its participation in the government’s ₹1-trillion research, development, and innovation (RDI) scheme, according to three people aware of the matter. This move will give the electric vehicle maker access to low-cost, long-term debt funding for its projects, filling a crucial gap while its inclusion under the production-linked incentive (PLI) auto scheme remains stalled.
The company is finalising the term sheet for the loan facility, which could provide working capital for R&D. The funding features interest rates as low as 2-3%, with disbursements linked to milestones for projects that have already been approved under the scheme.
The move comes as rivals TVS Motor, Bajaj Auto and continue to benefit from incentives under the ₹25,938-crore PLI auto scheme, intensifying competition in the electric two-wheeler market. Stiff entry criteria such as ₹10,000 crore revenue for auto companies and ₹1,000 crore net worth for non-auto firms has excluded firms such as Ather Energy from the scheme.
At least two executives noted that the company was yet to sign the final term sheet, which would then lead to the disbursal of funds in the coming months. Mint could not independently verify how much funding the company plans to draw from the scheme for its projects.
Inclusion in the RDI scheme would come at a strategically opportune time for the Bengaluru company, which is developing its new EL platform alongside a separate platform for future electric motorcycles.
“The funding through this scheme is targeted at technologies that can be commercialised at some point. It is not just work on concepts. Ather has some key projects in and such funding helps provide cheaper working capital,” said one of the people cited above, who did not wish to be named.
Union finance minister Nirmala Sitharaman announced the ₹1-trillion RDI scheme in her February 2025 Budget speech to encourage research and development in the corporate sector.
Under the scheme, the government will pick second-level fund managers (SLFM), who will then provide the money in the form of debt or equity, depending on the applicant’s requirement. The fund will finance 50% of the approved project cost, and the company will fund the rest. So far, the government has appointed two fund managers, Technology Development Board (TDB) and the Biotechnology Industry Research Assistance Council (BIRAC).
Queries sent to Ather Energy and the department of science and technology, the nodal government agency for the scheme, remained unanswered at the time of publishing.
Just what the doctor ordered
Experts said long-term capital for financing research projects in the electric vehicle space could deliver a meaningful boost to any company that received funding. “The biggest challenge for EV companies in India today is not manufacturing capacity, but access to patient capital for technology development,” said Vinay Piparsania, founder of MillenStrat Advisory & Research, an auto-focused consultancy.
“Lower-cost, long-tenure funding could encourage companies such as Ather to invest more aggressively in core technologies such as battery systems, power electronics, software, and energy management, rather than focusing only on near-term product launches,” he added.
Listed in May 2025, Ather saw its net loss narrow to ₹517 crore in FY26 from ₹812 crore a year earlier, aided by a 16.3-percentage-point improvement in earnings before interest tax depreciation and amortization (Ebitda) margin to -6.7%. Revenue rose 66% to ₹3,823 crore, driven by a 69% jump in volume to 263,000 units as it ended the year as the third-largest electric two-wheeler player. The company’s shares have surged by nearly 250% since listing, as against a 16% rise in Nifty Auto.
Ather seeks PLI changes
For Ather, any technology development funding would provide a significant boost since its efforts to lobby the government for inclusion in the PLI Auto scheme have not yet borne fruit. As many as 82 companies are shortlisted under the PLI auto scheme, which provides incentives ranging from 13% to 18% of sales value, based on eligibility.
Over the past year, Ather co-founder and chief executive has repeatedly emphasized that PLI auto funding provides a significant boost for companies looking to scale innovation.
“If India’s ambition is to lead in electric mobility, policy needs to recognise where innovation and capability are being built. Much of the work around indigenous platforms, battery systems, software, and domestic value addition is happening within electric first companies, and they will continue to set global benchmarks in design and technology,” Mehta wrote in a post on X on 30 April.
“What is needed is calibration of PLI, not overhaul. More flexible eligibility, aligned with localisation and R&D intensity, can help ensure we are building long term capability, not just near term scale,” he added.