Hinduja Group flagship firm Ashok Leyland is in talks with strategic and financial investors to raise funds for Switch Mobility, the newly formed electric vehicle (EV) subsidiary of the company.
The Chennai-based trucks and bus manufacturer has hived off its electric vehicle division to better tap growth opportunities through onboarding of partners.
Talking to Moneycontrol, Ashok Leyland whole-time director and chief financial officer Gopal Mahadevan said, “Yes, we will look at investors. Discussions are going on for strategic and financial investors.”
On November 13, the board of Ashok Leyland approved the transfer of the electric vehicle business to Switch Mobility Automotive for Rs 240 crore on a slump sale basis. The new company operates from its office in Leeds, the UK and Chennai in India.
Ashok Leyland wants funds for further development of its product portfolio and electric vehicle technology.
“The funds would be used for the development of new products and technology, for buses, electric LCV (light commercial vehicle) for global as well as for the domestic market. We will hear more on this soon,” Mahadevan said,
The EV initiative was very crucial for the company that is why it wants the right investor, he said.
As the government pushes for electric vehicles to cut its oil import bill and reduce pollution, auto majors, too, are going for EVs in a big way.
Mahindra & Mahindra, Bajaj Auto and TVS Motor Company are also looking at investors, while Tata Motors has already got a couple of investors on board for its EV subsidiary.
Switch Mobility primarily has electric buses with a seating capacity of 32 to 99, with a drive range of 200 to 300 km on a single charge.
It recently announced the delivery of the first lot of 40 electric buses to the Chandigarh Transport Undertaking.
Switch also has the electric version of the Dost and Bada Dost, the light commercial vehicles (LCVs) developed by Ashok Leyland. With a payload of 1,000 to 1,300 kg, these LCVs can travel 150 km on a single charge.
A few domestic automakers have already launched electric small commercial vehicles (SCV) for cargo applications. While these are startups, they have plans to rapidly expand to have a pan-India presence.