The next big story in the auto space appears to be electrical vehicles. Just last week, the chairman of Tata Sons announced a $3-4 billion investment in FY22 in the EV business. The other major CV manufacturer, Ashok Leyland, is not too far behind. Over the week end, Ashok Leyland announced an outlay of $150-200 million to layout the blueprint for its EV foray. Ashok Leyland has already invested $130 million in its EV foray in last few years.
The EV initiatives of Ashok Leyland are housed under its Switch Mobility unit. Switch Mobility was formed by combining the electrical commercial vehicles operation of Ashok Leyland and Optare of the UK. Switch Mobility has been making EV buses and have already put about 280 such green EV buses on the roads. Now it is looking to scale up the electrical vehicles (EV) business to the next level.
The proposed investment of $150-200 million will be used for new vehicle development, technology enhancement, partnerships and actual production. Switch Mobility is planning electrical vehicles with different price points to cater to different market segments. Considering the steep cost of owning EVs in India, Ashok Leyland is exploring having an OPEX based model where the ownership can be on use basis.
Currently, the market size of electrical buses and light trucks is estimated at $5 billion. However, this is expected to grow exponentially to $70 billion by the year 2030 and that is where Ashok Leyland sees the biggest opportunity for the company. Ashok Leyland sees tremendous potential for electrical shift in buses, light commercial vehicles (LCV) and intermediate commercial vehicles (ICV). It will also explore “Mobility as a Service” model to give a boost to electrical vehicles.
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