New Delhi: The European Union (EU) may see a slower offtake of electric vehicle (EV) sales in the region, especially for commercial vehicles (CVs). Concerns emerge amid the global energy crisis triggered by the ongoing unrest. This is something also worrying the CV maker Ashok Leyland as it may impact its EV subsidiary Switch Mobility’s global plans.
“With the global uncertainty, ongoing unrest and the energy crisis, there has been an impact on demand in the EU,” Dheeraj Hinduja, Executive Chairman, Ashok Leyland, told ETAuto in the company’s post earnings call. He said that while the Indian government has been pushing forward the green agenda, many European countries, especially the UK, have delayed the timeline of phasing out the diesel.
“The shift from ICE to electric is happening. We also see a lot of tenders that are coming through, but the pace is possibly slower than what was planned. However, it is a temporary blip. Once some of these disturbing situations in Europe are settled down, we should see the growth momentum again,” Hinduja said.
He is confident that Switch will grow in the European markets with the launch of its new E1 12m bus in 2024, developed specifically for this market. Going forward, he expects the upcoming COP28 conference also to help bring back the momentum towards alternate fuels.
Ashok Leyland to invest INR 1,200 cr in Switch Mobility
Ashok Leyland’s Board of Directors Thursday approved an investment of INR 1200 crore in Switch Mobility as equity through its holding company Optare PLC UK.
“The funds infused will be used for capital expenditure, R&D and meeting operational requirements both in the UK and India. The funds will be infused over the next few months after necessary statutory approvals in one or more tranches,” the company said.
To keep pace with its growth plans, the development comes after the company having engaged over a couple of dozen external investors over an almost 2-year period.
Hinduja said, “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.”
Switch Group of Companies, including Switch Mobility Ltd- UK and Switch Mobility Automotive Ltd- India, house the electric mobility initiative of Ashok Leyland. The companies focus on e-buses and e-LCVs.
Currently, Switch has over 800 buses plying in India and the UK. Last year, Switch India launched the double decker e-bus in India. In September this year, the company launched its e-LCVs.
Shenu Agarwal, Managing Director & CEO, Ashok Leyland, said that the balance sheet of Ashok Leyland can comfortably fund the initiatives of Switch. Both India and European markets are going to be important growth centers for EV trucks and buses. “In the coming year we are expecting our e-LCVs to drive faster customer adoption.”
Ashok Leyland’s Profit After Tax (PAT) nearly tripled to INR 561 crore in the July-September quarter. In the year-ago period, the company had reported a PAT of INR 199.31 crore.
Revenue during the second quarter of the current fiscal grew to INR 9,638 crore from INR 8,266 crore in the second quarter of FY23, the company said in a statement.
The automaker expects the upswing momentum seen in the industry in the first half of FY 2023-24 to continue with the Medium and Heavy Commercial Vehicles (MHCV) segment likely to log 8-10% growth in FY24 while light commercial vehicle (LCV) segment estimated to grow at 4-5%.
The company’s net debt stood at INR 1,139 crore at the end of the second quarter.
