The investment scale will depend on India's EV market growth, with initial Rs 500 crore outlay for pack assembly followed by cell manufacturing expansion.
12 Nov 2025 | 2690 Views | By Shahkar Abidi and Ketan Thakkar
India’s commercial vehicle giant Ashok Leyland’s proposed investment in domestic battery manufacturing could potentially reach around Rs 5,000–10,000 crore over the next 7–10 years.
This range is directly contingent on future market dynamics, specifically how the EV market or the battery energy storage system market behaves in India in ...
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India’s commercial vehicle giant Ashok Leyland’s proposed investment in domestic battery manufacturing could potentially reach around Rs 5,000–10,000 crore over the next 7–10 years.
This range is directly contingent on future market dynamics, specifically how the EV market or the battery energy storage system market behaves in India in the future, stated Shenu Agarwal, MD & CEO of Ashok Leyland, in a post-results briefing with the media.
The company had earlier pegged the investment at around Rs 5,000 crore during the same period.
"So right now, we are still maintaining Rs 5,000 crore, but there is a possible upside depending on the market adoption of electric vehicles," said Agarwal.
Ashok Leyland, in September, announced its plans to manufacture next-generation batteries for both automotive and energy storage applications in partnership with China’s CALB Group, one of the world's leading battery technology companies. CALB Group, which currently stands as one of the suppliers to Ashok Leyland, is the third-largest global battery manufacturer, with a current production capacity of 90–100 GWh annually. CALB Group will not be making any investment in the partnership at present, as per the agreement.
This multi-phase strategy is projected to unfold in phases. The initial stage is designed as a smaller, more tactical investment, capped at a maximum of Rs 500 crore and spread over the next one and a half years. This first phase focuses primarily on pack assembly, which involves integrating individual cells into functional modules and battery packs ready for use in vehicles. The subsequent phase, Phase Two, will involve a substantially larger investment aimed at bringing cell manufacturing capability onshore.
The company is currently evaluating multiple options for the battery plant location. The selection will be based on key factors such as logistics, cost, scale availability, and government benefits. A decision is expected by the end of December or early January, the company management noted.
Captive Demand and Market Expansion Strategy
Initially, the battery manufacturing will serve captive demand from Ashok Leyland, Switch Mobility, and other Hinduja Group companies, with expected requirements of 4–6 GWh over the next 4–5 years. Switch Mobility, Ashok Leyland's EV subsidiary, currently maintains an order book of over 1,800 electric buses and targets to break even in the current fiscal year. Likewise, Switch Mobility's e-LCVs are another segment in which it is aggressively trying to penetrate the market.
Ashok Leyland's top management indicated that the strategy will later expand to serve other original equipment manufacturers (OEMs) and auto companies across passenger cars, two-wheelers, three-wheelers, and battery energy storage applications. This will allow Ashok Leyland to capitalize on economies of scale in India's rapidly expanding EV ecosystem.