New Delhi: Solidifying its progress towards developing net zero carbon mobility, India’s leading commercial vehicle player Ashok Leyland aims to shift its entire electric vehicles (EV) business to its 100% subsidiary Switch Mobility in a few years. In the process, the Hinduja Group flagship firm will invest about USD 200 million for its EV journey via Switch mobility, senior company officials said.
Switch Mobility will introduce its first electric light commercial vehicle (e-LCV) in India by the end of December and the company has already bagged 2000 orders for it from 21 logistics companies, the company management said. “Right now, they are undergoing testing with a number of prospective clients,” executive vice chairman and CEO Andrew Palmer Palmer said.
Ashok Leyland has earlier invested USD 130 million in the UK-based Switch Mobility whose core business is next-generation electric bus and light commercial vehicles.
“From our perspective we will invest USD 150million-USD200 million over the next few years. Ashok Leyland by itself has been incubating the EV division. As we move forward the focus of the investment will be on new vehicles, prototypes, tie-ups, technologies etc. And once the business scales then we will invest further into manufacturing facilities,” Gopal Mahadevan, CFO, Ashok Leyland, told reporters during a virtual meeting.
The company management further said that even though Ashok Leyland has made the initial capital function, Switch Mobility will have funding coming from the financial and strategic investors with the former exploring all opportunities.
“The plan is to keep Switch as Independent as possible as far as fundraising plans are concerned. We believe that Switch will be able to raise its own capital for its expansion plans as we go forward,” Mahadevan added.
On the branding and structuring, Switch Mobility Ltd, UK, executive vice chairman and CEO Andrew Palmer highlighted that all of the EV vehicles of the Group in future will be sold under Switch brand. “We have taken all of the EV intellectual property essentially out of the old Optare and put its contribution into global Switch. Likewise, the EV division of Ashok Leyland has also been carved out into Indian arm of Switch which will have all EV assets of the company,” he added.
Chennai-based Ashok Leyland acquired the British bus maker Optare in 2013 which is now only looking after the service of residual diesel bus business in the UK.
EVs, including battery-electric and fuel cell-powered vehicles, are currently a niche segment of the global automotive industry, estimated at less than 5% of sales by analysts. Even today, EVs are more costly to manufacture than those with internal combustion engines due to the battery and fuel cells that power the vehicles. However, automotive executives and analysts are hopeful that EVs, led by stricter regulations to reduce carbon emissions, are the future for the automotive industry.
According to chairman Dheeraj Hinduja currently 280 vehicles from Switch mobility are plying on road in foreign markets.
“We feel very confident that we have developed products that have been accepted by the market…With 280 vehicles already on the road, we feel that Switch today will allow Ashok Leyland to fulfill its long term vision of being in the global top 10 (commercial vehicles player,” Hinduja added.