Commercial vehicle (CV) major Ashok Leyland, which is planning to raise around $300 million to fund the expansion and technology investments in its electric vehicle arm Switch Mobility, is now said to be weighing the options for setting up a new manufacturing facility for electric vehicles (EVs) in the country.
In a sense, it was inevitable as almost all Indian auto major has been moving towards the EVs segment as the demand for them is now slowly improving.
Further, according to a PTI report, the Chennai-based Ashok Leyland is also getting ready Rs 500 crore investment to develop powertrains based on alternative fuels like CNG, hydrogen and electric for its commercial vehicles range.
Ashok Leyland is already in talks with investors for both Switch Mobility and for e-mobility as a service. In July 2021, US-based drivetrain-maker Dana had picked up a 1% stake in Switch for $18 million.
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Plant in Spain, and a new one in India
The Hindujas-backed company wants to expand its electric vehicle portfolio as well as develop new engines. Switch Mobility is coming up with its new manufacturing and technology centre on a greenfield site at Valladolid in Spain. This unit will house the production of its first electric bus designed specifically for the European market.
"In Spain, we are coming up with a manufacturing facility and R&D centre and there are plans to grow this over the next few years. In India, we will be optimising the facilities that are available with Ashok Leyland," its Executive Chairman Dheeraj Hinduja was quoted as saying in the PTI report.
But Ashok Leyland will eventually move to an independent facility for Evs in India. "And that is something that is being looked at by the management team," he added.
Ashok Leyland will use its commercial EVs Dost and Bada Dost to cater to the domestic and the SAARC markets in the short-term. "We are also looking at the production of a brand-new LCV (light commercial vehicle) range from the perspective of Switch which will be for the European UK and the US markets," the Ashok Leyland official said.
In November 2021 Ashok Leyland board cleared the transfer of its EV business to its step-down subsidiary, Switch Mobility Automotive (Switch), for Rs 240 crore on a slump sale basis. Through this, Switch – a combined entity of Ashok Leyland's electric CV operations and the former bus manufacturer Optare of the UK -- will act as a separate OEM (original equipment manufacturer) focusing on buses and commercial vehicles in the EV space.
The company is also looking to mark its presence in the entire alternate fuel segment including hydrogen, compressed natural gas, liquefied natural gas, bio-diesel and methanol in the next five to ten years.
Ashok Leyland's long-term goal is to become a net-zero carbon company, with multiple fuels in the alternative segment.
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