Ather 450X subscription model explained- why, how much, is it worth? - eNidhi India Travel Blog

Ather 450X subscription model explained- why, how much, is it worth?

Traditionally, when we buy something, we own it, use it, maintain it, sell it or dispose it. However, with changing times, renting and subscribing models are being experimented in many industries and there are takers for this as this model has some advantages.

India's most promising electric vehicle start up, Ather Energy has launched Ather 450 few years ago and now they have launched Ather 450X, an improved version of Ather 450. While the vehicle costs upwards of 1 lakh rupees, many potential buyers are turned off by the subscription model, under which they are expected to pay up to INR 2000 +GST per month.

In this post I have explained the reasons, pricing, benefits and if one should avail the subscription model of Ather.
Before we jump into the pricing, it is important to understand why Ather is desperate to push subscription model:

1. Ather Grid: Ather has taken upon themselves to set up charging stations all around the city. This costs money- rental for Ather Grid Space, staff salary, equipment and utilities, electricity bill etc. By charging a monthly fee to its customers, Ather hopes to recover this ongoing operational expense.

Other sellers like Bajaj or TVS won't have this expense, as they will wash their hands off after giving a home charger to you. Charging elsewhere is your headache.

Advantage of Ather Grid is that it actually enhances usable range of your e-scooter. Even though designated range is say 85 kms, if there is an Ather Grid towards the end of your 85 km journey, you can charge and cover 85 kms or more. This way, let us say Ather expands to Mysuru n sets up an Ather Grid in Mandya or Chennapatna, users in Bengaluru can ride till Chennapatna, spend some time around while Ather charges up, then proceed to Mysuru, charge there again, roam around, charge again, come back to Bengaluru with a stopover at Chennapatna. (400 kms total) This will NOT be possible with any competition escooters, even if they promise 20-50% more range than Ather. (Unless someone sets up public charging station for all EVs)

2. Smart Connect: Ather 450X comes with a built in sim card - Sim card and data plans cost money, at least 100-300 Rs per month depending on plan & data used-so Ather needs to recover this from customers.

My personal suggestion is to make this sim optional- let users connect to net on WiFi using their own phone tethering on need basis. This way cost of an additional sim is eliminated. If there's a need customer will connect using his/her own phone to use navigation, upgrades etc

3. Continuous Updates: Ather makes continuous updates to software and these are pushed regularly to already sold vehicles. While physical hardware remains same, software part is regularly upgraded to fix issues, introduce new features, collect and analyse data, plan future improvements etc. Those software engineers need to be paid, so customers need to cough up every month.

Is subscription mandatory expense with Ather 450X? What happens if I don't pay for subscription?
Ather has kept everything optional. Earlier Ather One subscription (which covered data, software updates and Grid access) used to cost INR 700 a month. Now it ranges from INR 400 to 2000 a month + 18% GST.

Pay Upfront
Subscription

Plus
Pro
PLUS Scheme
PRO Scheme
Initial Payment
(Ex showroom)
149000
INR 159000
99999
99999
Approx On Road Price (Add insurance, registration etc)
1.8 lakhs
1.92 lakhs
1.2 lakhs
1.2 lakhs
Monthly Subscription
400 + GST
18%?
400+ GST
1699+ GST
1999 + GST

Some features disabled
All features
Some features disabled
All features
At the minimum Ather is expecting you to pay INR 400+ GST per month, to access Ather Grid, get software upgrades and smart features (sim card). I think this is optional- if you don't opt for it you can't use navigation, you can't charge at Ather Grid and you won't get any software fixes and upgrades. If you're not going too far from home and don't fancy software upgrades you might be able to skip this.

Not sure if there's an option to subscribe just for one month once in say 2 years to receive software upgrades, instead of having to pay 6000 INR + per year.

Also, if there is any bug or defect shouldn't Ather push it free of cost even if I don't have any subscription? I can understand them charging/expecting a subscription fee for new features. Ather needs to clarify on this.

Plus and Pro subscription schemes of Ather 450X
For a monthly fee of INR 1700-2000 + GST, you will get battery replacement warranty (if performance drops below 80%), + 3 features worth INR 400 (Unlimited charging at Ather Grid, Connected services & software upgrade). And Ather Dot home charger is anyway free with the vehicle.

Essentially you will be paying INR 1300 to 1600 per month for battery replacement guarantee. Ather gives 3 year warranty on battery, so it is total waste of money to pay INR 1300 to INR 1600 per month extra for 3 years (that will be 47000-58000 INR, cost of a new battery).

Is it really worth it? May be it is better to skip the subscription, save up yourself and buy a new battery end of 3-4 years (battery price may come down in next few years).

But even if you are not opting for subscription, you are paying INR 50000-60000 more upfront. Factoring 3 years life, that is 1400-1700 per month extra collected upfront, without battery replacement, Ather grid access and software updates. So either way Ather is collecting their subscription fee.

The subscription model also is a clever move to hide total cost of ownership- by advertising an MRP of 99999, Ather can create an impression that 450X is cheaper than competition, which in reality it isn't.

Would have been great if one can opt for battery subscription after 2-3 years- but don't think Ather will allow that. (like pay 99k, take home scooter, activate subscription only after 2 years)

Looks like subscription amount doesn't cover the following
-Insurance- Approx 4000-5000 INR per year
- Maintenance/Consumables- Tyre replacement, new belt or other wear and tear

Also need to understand what will happen when Ather 450X changes hands. Is the new owner required to honor old subscription model or can he/she shift to a different one? Like I can manage for 2-3 years without battery subscription, then sell it to my wife or friend- can that person opt for battery subscription and claim batter replacement the first month itself? Or Battery subscription is only valid if subscription has been availed non stop throughout vehicle's life? What are the rules? Not clear.

Would earlier owner of Ather 450 continue to get same service for INR 700 a month? (earlier Ather One subscription fee) or do they need to upgrade to one of the options above?

2000 INR per month is 28 litres of petrol, good enough for about 1500 kms or 50 kms a day, adequate for most users. Because of this, Ather's subscription model is kind of spoiling the economics of owning an electric vehicle, turning off potential buyers. Of course Ather is providing a world class scooter, lots of features and benefits but would cost conscious Indian buyer fall for it? We need to wait and see. It is a decision both Ather and Buyer need to make- looking for a cost effective electric vehicle or a premium experience.

What is your thought on Ather 450X subscription?

2 comments:

  1. A petrol vehicle like access 125 which gives the same performance seems to be cheaper than ather plus recharging takes very less time too. Definitely not worth to have it for just having navigation as a mobile could do that already.

    ReplyDelete
    Replies
    1. Yes, Ather kept it premium priced and it is affecting sales.

      Delete

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