Ashok Leyland, along the lines of various other global automotive companies, is steadily evolving its business model to focus on electric vehicles
Indian automotive giant Ashok Leyland is reportedly setting up a ‘mother plant’ for its electric vehicles business in India under its UK subsidiary Switch.
As per a TOI report, Switch UK will set up an Indian entity which in turn will put up the plant. The company’s entire electric vehicle business will move to Switch which will also develop EV-specific platforms in buses and electric light commercial vehicles.
The timing of this is interesting as it comes soon after Switch’s acquisition of Switch Mobility Automotive India, which was formed in December 2020 and is engaged in the manufacture and sale of electric vehicles.
Ashok Leyland, along the lines of various other global automotive companies, is steadily evolving its business model to focus on electric vehicles, a market that is growing at an alarming rate and is expected to reach soaring heights in coming years.
As part of its plans to strengthen green transport solutions, the company formed two new units through Switch Mobility Ltd, the first of which was Switch Mobility Automotive Ltd which was a part of its global entity and carried on the electric vehicle strategy in India.
Ashok Leyland’s existing EV products like the e-buses it has already supplied to cities like Ahmedabad and Patna will also move to Switch, said Gopal Mahadevan, CFO, Ashok Leyland, to TOI, “The EV investments for Switch will not come out of Ashok Leyland,” he added.
The company has announced it will spend upto Rs 750 crore on ‘debottlenecking the LCV factories’ and on ‘safety and regulations and residual spend’. “We will fund capex with debt because our debt equity ratio is very low and as of March 31, 2021 we have Rs 2,600 crore of debt on our books,” said Mahadevan.