Ashok Leyland on Thursday said its board has approved an investment of Rs 1,200 crore in its EV arm Switch Mobility for capital expenditure, R&D and meeting operational requirements in the UK as well as in India.
The funds will be infused over the next few months after necessary statutory approvals in one or more tranches, Ashok Leyland said.
"The board of directors of Ashok Leyland at their meeting today (Thursday) approved an investment of Rs 1,200 crore in switch mobility as an equity through its holding company Optare PLC UK," Leyland Executive Chairman Dheeraj G Hinduja Ashok said at a virtual media briefing after the second quarter earnings announcement.
"The funds infused will be used for capital expenditure, R&D and meeting operational requirements both in the UK and India.
"Electric vehicles, especially in buses and light trucks, have a very bright future as governments and private customers are driving the green agenda. We are very happy with the progress made by Switch, and will continue to invest on building its capabilities," Hinduja said in the statement.
Ashok Leyland is confident that Switch will grow further in the European markets with the launch in 2024 of its new E1 12m bus developed specifically for the European market.
"Our portfolio of electric buses will cover value and premium segments meeting all price points for many global markets," Hinduja added.
Switch Group of companies (Switch Mobility Ltd -- UK and Switch Mobility Automotive Ltd -- India) is the e-mobility initiative of Ashok Leyland, focusing on e-buses and e-LCVs.
As on date, Switch in India and the UK has over 800 buses plying and has an order book of over 1,200 buses, the company said.
Switch India had launch of India's only double-decker e-bus last year while in September this year, it launched its e-LCVs.
The company said it has signed an initial pact for over 13,000 vehicles for its e-LCVs, which it will start delivering from the fourth quarter of this fiscal.
"The market for EVs is growing rapidly, driven by the trend towards carbon neutrality. The government support is further helping the market to expand. We will continue to build capability in this business by investing in product development as well as in expanding operations," Ashok Leyland Managing Director and CEO Shenu Agarwal said.
Both India and European markets are going to be important growth centres for EV trucks and buses, he said.
In the coming year, the company is expecting our e-LCVs to drive faster customer adoption, he said, adding, "The balance sheet of Ashok Leyland can comfortably fund the initiatives of Switch."
Earlier, responding to a question on the company's plans to rope in a strategic partner, Hinduja reiterated that "we felt that we needed a partner who would have the long-term vision that we do and we wanted to get the right valuations as well. But it has been over 4-5 months that the board had decided that it would be better for Ashok Leyland to continue this growth."
"This infusion (of Rs 1,200 crore)... gives further confidence that the business plans of Switch are robust. We're moving in the right direction," he said.