Staff Writer
New Delhi: Amid ongoing economic challenges in the UK and Europe and a slower-than-anticipated transition to electric vehicles (EVs) in public transport, Switch Mobility Limited UK (Switch UK) has announced the commencement of a consultation process with employees regarding the potential cessation of manufacturing and assembly activities at its Sherburn facility.
The Board of Directors of Switch UK has made this decision in light of persistent economic uncertainties in the region. As part of the review process, the company has assured stakeholders that it will fulfill all existing orders and continue providing aftermarket support for its current vehicle fleet. However, future market demands in the UK and Europe will be met through alternate manufacturing sites operated by its parent company, Ashok Leyland, in India and the UAE.
While operations in the UK face potential downsizing, Switch Mobility Automotive Ltd, India (Switch India) is set to expand its presence in the rapidly growing Indian EV market. India’s public transport sector has shown promising adoption rates for EVs, prompting the company to reinforce its investment and operations in the region.
Mr. Shenu Agarwal, MD & CEO of Ashok Leyland, emphasized the strategic rationale behind this shift, stating: “Ashok Leyland has remained committed to the UK market for the last 15 years. However, the adoption of zero-emission passenger vehicles has been slower than expected. Given the current financial landscape, we believe this is the right time to minimize losses in the UK. Conversely, the Indian EV bus market is thriving, and Switch India is on track to achieve EBITDA breakeven in FY25. We anticipate tripling our production volumes in FY26, backed by an order book exceeding 1,800 electric buses.”
Additionally, Switch India has established a dominant market share in the e-Light Commercial Vehicle (e-LCV) segment within the 2-3.5T range, exceeding 80%. The company forecasts further growth of 50-80% in volumes in FY26.
Mr. K M Balaji, Chief Financial Officer of Ashok Leyland, outlined the financial benefits of restructuring operations: “The potential cessation of manufacturing activities in the UK is expected to help mitigate financial losses. The cash flow needs of Switch UK will be supported by the GBP 45 million equity infusion already approved by Ashok Leyland’s Board in February 2025. Meanwhile, Switch India has surpassed performance expectations and is unlikely to require additional significant equity investments in the near future.”
From a broader perspective, Ashok Leyland remains confident in the long-term value generation of the Switch EV business. The company believes that the strategic reallocation of resources toward high-growth markets, such as India, will yield substantial returns, outweighing the investments made in these entities.