Ather Energy sets up Hong Kong subsidiary to tackle supply chain disruptions

Ather Energy is setting up a wholly owned subsidiary in Hong Kong to support critical procurement functions and strengthen supply chain resilience. The company’s board has approved the proposal, according to a regulatory filing on the stock exchanges.

1. Aims to enhance supply chain resilience in the Asia-Pacific region
2. Comes amid China’s export restrictions on rare earth magnets

Ather Energy addresses supply chain challenges

The company’s production has previously been affected by rare earth magnet shortages.

Late last year, the Bengaluru-based manufacturer faced a slowdown in production due to shortages of rare earth magnets. During this period, even established players like Bajaj were forced to temporarily halt EV production altogether. In an effort to mitigate such disruptions going forward, Ather has decided to set up a subsidiary in Hong Kong to support the procurement of critical raw materials.

China has also tightened regulations on the export of rare earth magnets, which is a key component in electric vehicle powertrains. The country currently accounts for around 60 percent of global rare earth production and controls nearly 90 percent of global refining capacity.

Our sister publication, Autocar Professional, reports that Ather Energy recently deferred the submission of demand incentive claims worth Rs 26.25 crore, citing supply chain disruptions caused by China’s export ban on heavy rare earth magnets. These disruptions are said to have affected up to 52,500 vehicles under the PM E-DRIVE scheme.

“The wholly owned subsidiary [WOS] is proposed to be incorporated with the primary objective of supporting the company’s critical procurement functions and enhancing supply chain resilience within the Asia-Pacific (APAC) region,” Ather Energy said.

Ather Energy has also previously stated that it is evaluating alternative solutions to reduce its dependence on rare earth materials from China. These include exploring the use of light rare earth magnets and ferrite-based motors, as well as considering partial motor assembly in China as a workaround. The company remains optimistic that supply constraints will ease over time.

Despite these challenges, Ather continues to see strong growth. The company registered sales of 2,00,785 units in 2025, marking a 59 percent increase over the previous year. Its market share also improved to 16 percent, up from 11 percent in 2024.

With input from Kiran Murali.