Switch Mobility Banks on Robust Tender Wins Despite Rare Earth Tightness

For commercial vehicle giant Ashok Leyland, whose EV subsidiary Switch Mobility is making inroads, the issue of shortages of rare earths is now firmly on the radar of its top leadership.

Dheeraj Hinduja, Chairman, Ashok Leyland, said, "I would like to say that for the moment we are okay." "We are looking at alternatives and how to ensure that our production doesn't get disrupted," he added.

The rare earth supply is more pertinent to the company's electric vehicle offerings in the form of e-buses and e-LCVs, which they manufacture under the Switch Mobility brand, their EV subsidiary.

Ashok Leyland's management stated that Switch Mobility, currently has a robust order book. This strong performance is driven by the continued high demand in the market for EV buses.

A new tender for over 10,000 buses is anticipated to open in September, and Switch Mobility plans to submit bids for these new opportunities. Beyond upcoming tenders, there are already another 1,000 to 1,200 vehicles in progress. While the specifics of these vehicles were not detailed, it indicates a significant ongoing production pipeline for Switch.

The scarcity and geopolitical complexities surrounding rare earth elements—essential for high-performance EV motors—have prompted industry-wide discussions. Hinduja noted that all representations have been made to the government by SIAM (Society of Indian Automobile Manufacturers), indicating a collective effort by automakers to seek policy support and solutions.

The Chairman concluded by indicating that while the situation is currently manageable, a clearer picture is anticipated soon. "In the next few weeks we would definitely have a much clearer view on where we stand," he stated. This ongoing assessment highlights the dynamic nature of supply chain risks in a rapidly evolving technological landscape. As Switch Mobility continues to perform well, even achieving PBT break-even for the quarter, securing essential components like rare earth magnets will be paramount to sustaining its growth trajectory.