Hinduja Group’s commercial vehicle (CV) manufacturer Ashok Leyland has significantly increased its stake in Optare Plc, the UK-based holding company of Switch Mobility, from 92.59% to 93% by investing GBP 45 million (approximately Rs 500 crore). This move aligns with the company’s long-term strategy to strengthen its electric mobility business and support expansion in both the UK and India.

Allotment of Shares and Financial Structure

According to Ashok Leyland’s regulatory filing, the Board of Directors of Optare Plc allotted 649,63,55,352 ordinary shares of £0.001 each at an issue price of £0.006927 per share on April 1, 2025. This capital infusion is expected to enhance liquidity and facilitate growth initiatives for Switch Mobility’s global operations.

Purpose of Investment

Ashok Leyland had earlier announced plans to invest Rs 500 crore into Optare Plc to fund capex requirements, with a portion of the funds expected to flow into Switch Mobility’s Indian arm. The investment aims to reduce the financial burden on Switch UK while ensuring future growth in India.

Challenges Faced by Switch UK

Despite efforts to expand its electric vehicle (EV) business, Switch UK has been struggling with fluctuating revenues due to inconsistent orders. To mitigate losses, Ashok Leyland recently shut down one of the manufacturing and assembly operations at its Sherburn facility in the UK. The company’s MD and CEO, Shenu Agarwal, highlighted that inconsistent demand has led to periods of underutilization of capacity at the plant.

European EV Market Trends and Impact on Switch Mobility

The demand for electric buses in the EU remains subdued, with diesel-powered buses still dominating 62% of sales as of February 2025. Data from the European Automobile Manufacturers’ Association (ACEA) indicates that electric vehicles (battery electric and plug-in hybrid) account for only 15.9% of new bus sales, with electrically chargeable vehicles making up just 1.9%.

The slow adoption of EVs in public transport is attributed to:

• High initial costs

• Range anxiety

• Insufficient charging infrastructure

Positive Outlook for Switch India

While Switch UK faces market headwinds, the outlook for Switch India remains promising. According to Ashok Leyland’s leadership, Switch India is expected to be a key growth driver. MD and CEO Shenu Agarwal emphasized that Switch India is positioned to be “value-accretive” to Ashok Leyland due to its rising demand for electric buses and government initiatives supporting EV adoption in India.

Future Plans and Industry Impact

The latest investment highlights Ashok Leyland’s commitment to the EV segment, especially in India, where government subsidies and infrastructure developments are accelerating the transition to electric mobility.

• For the UK market, Ashok Leyland is evaluating strategies to improve operational efficiency and secure consistent order flows.

• For India, the focus remains on expanding production capacity, leveraging policy support, and capitalizing on rising demand for electric buses.

With this strategic investment, Ashok Leyland is reinforcing its global footprint in the EV space while addressing market-specific challenges. The company’s ability to navigate the European slowdown while capitalizing on Indian market growth will be crucial in determining the long-term success of Switch Mobility’s expansion plans.

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