Ashok Leyland's India EV Plans To Get A Boost From 'Switch'ing Off UK Facility
Key takeaways from Ashok Leyland's analyst conference call after it announced that Switch Mobility has begun the process to close its UK manufacturing unit.

Even as Ashok Leyland Ltd. has announced that its electric vehicles business, Switch UK, is consulting for closure of its manufacturing, the India arm is expected to see an up shift and head towards becoming Ebitda breakeven in the upcoming financial year (FY26).
On Wednesday, Switch Mobility Ltd. UK said that it would begin a consultation process for the cessation of manufacturing facility in Sherburn. It cited economic uncertainty as one of the reasons for the move.
The UK EV unit, however, does not have plans to exit the market and is re-evaluating its business model. The consultative process is expected to last 45-90 days.
But Switch India is expected to double revenue in FY25, the company said.
Here are some key takeaways from its conference call on Wednesday.
Key Reasons For Closure
Switch cited the inability to derive benefit to scale the UK business as key factor for this move. However, it will execute and complete all the orders on hand and continue to provide aftermarket and service support.
Switch UK was not able to achieve volumes and cost economics, the management said.
The company's losses stood at roughly £21 million or Rs 230 crore for this year. Switch UK employs 240 people. Ashok Leyland has said it will look to retain a lot of employees due to the continuity of aftermarket business in the UK.
The company estimates closure costs of £5-10 million.
Financial Impact For Optare PLC
Both Switch UK and Switch India are subsidiaries of Optare Plc. Ashok Leyland has invested close to Rs 2,600 crore in Optare till date. According to its 2024 annual report, Optare Plc reported losses of Rs 456 crore.
The truck maker had invested Rs 500 crore in the venture in the third quarter of fiscal 2025. Currently, Switch UK also has debt of £80 million but the company emphasised that this needs to be repaid only by 2029.
Potential closure of UK manufacturing would also remove the current £21 million profitability drag on the company. The management sees no requirement for impairment or equity infusion, as the overall EV business is now significantly more valuable than the invested amount.
Switch India: The Golden Goose
Compared to its UK counterpart, Switch India has been growing multifold and has been profitable over the last few years. Switch India is expected to be Ebitda breakeven in fiscal 2025 and is expecting to breakeven in profitability as well in next four-six quarters, the company said. The management also said they expect to double revenue in FY25 for Switch India.
Switch India is also targeting 3 times volume growth in FY26.
Big Change In India Business Model?
A look at Switch's India business brings forth a key aspect on how it sells vehicles. The company said the new business will not be via GCC or Gross Contract Nature.
A GCC model is where a private operator (in this case Switch India) takes on the responsibility of owning, operating, and maintaining buses for 10-12 years, while the public authority (like BEST or state transport undertakings) only pay a fixed per-kilometer fee, keeping all revenue collected.
This is a key strain on financials for bus makers like Ashok Leyland Ltd. The company invests heavily in manufacturing buses but the payment for the same is received in instalments over a decade.
Companies hence prefer to just sell buses, not operate them, since operating city buses carries substantially higher risks due to the weak financial muscle of state transport undertakings.
Switch India will be looking to supply many buses on outright sales, which could put less strain on financials.