Switch Mobility Limited UK, a stepdown subsidiary of Ashok Leyland, announced today that it is considering ceasing its manufacturing and assembly operations at its Sherburn facility in the UK. The Board of Directors has approved the commencement of a consultation process with employees that could lead to the closure of the facility.
The decision comes amid continuing economic uncertainty in both the UK and Europe, coupled with a slower-than-expected transition to electric vehicles (EVs) in the public transport sector. According to Ashok Leyland, the tepid adoption of zero-emission passenger vehicles in the UK market has prompted the company to reassess its operations after a 15-year commitment to the region.
"While Ashok Leyland remained committed to the UK market over the last 15 years, adoption of zero emission passenger vehicles has been tepid. This seems to be the right time to cut down losses in the UK market," said Shenu Agarwal, MD & CEO of Ashok Leyland.
Despite the potential manufacturing shutdown, Switch UK has confirmed it will complete all existing orders and continue to provide aftermarket support for vehicles already on the road. The company plans to serve the UK and European markets from Ashok Leyland's alternative manufacturing sites in India and UAE when market conditions improve.
Meanwhile, Switch Mobility Automotive Ltd in India (Switch India) is planning to intensify its focus on the rapidly growing Indian EV market. The Indian subsidiary is expected to achieve EBITDA breakeven in FY25 and aims to triple its volumes in FY26, supported by orders for more than 1,800 e-buses.
K.M. Balaji, Chief Financial Officer of Ashok Leyland, stated that the cessation of UK manufacturing activities is expected to reduce operational losses. The current cash flow requirements for Switch UK will be met through a previously approved GBP 45 million equity infusion from Ashok Leyland's board in February 2025.
Switch Mobility, originally founded as Optare in 1985 in the UK before rebranding in November 2020, has been a significant player in the UK's electric bus market. The company introduced Britain's first domestically-built pure electric bus, the Metrodecker EV, to London in 2014 and currently operates over 150 electric buses across major UK cities including London and York.
The company has deployed more than 1,000 electric vehicles globally and has covered over 150 million green kilometers in its mission to lead the transition to carbon-neutral transport.