Switch Mobility's Global Push Starts in UAE
Switch Mobility is expanding globally with a new manufacturing plant in Ras Al Khaimah, UAE. This facility can produce 10,000 buses annually, positioning Switch to serve growing markets across the GCC, Africa, and Europe. Along with its Indian operations, the company plans to double its fleet to about 10,000 electric vehicles over the next two years. Switch currently operates over 5,000 electric vehicles and has an order book worth ₹1,500 crore, providing revenue visibility. The expansion aims to diversify beyond India and improve cost efficiency by being closer to international customers. Exports are becoming a key focus, with initial shipments to Mauritius and plans for Seychelles, Bhutan, and Nepal.
Switch Mobility Aims for Self-Sustaining Growth
Switch Mobility is shifting its focus to sustainable growth, having achieved EBITDA and Profit After Tax breakeven in FY26. This marks a move toward becoming self-funded rather than relying on its parent company. Parent Ashok Leyland, which has invested over ₹1,200 crore in its EV subsidiary, is now adopting a careful approach to investments. CEO Ganesh Mani described the business model transformation from sales-led to operations-led, emphasizing long-term vehicle lifecycle management and maximizing uptime. The company's connected fleet, processing about 12 million data points yearly, aims to ensure near 98% vehicle availability, building customer trust. In India's electric bus market, Switch Mobility sold 950 units in 2025, a six-fold increase from 2024, capturing around 21% market share and ranking among top players like PMI Electro Mobility and Olectra Greentech.
Rising Costs and Market Headwinds for EVs
Like the rest of the automotive industry, Switch Mobility faces challenges including rising battery and commodity costs, persistent supply chain issues, and currency fluctuations. Steel prices are expected to stay steady until early 2026 but could rise due to tariffs and seasonal demand. Battery pack prices are forecast to fall, with Goldman Sachs predicting nearly $80/kWh by 2026, and LFP batteries gaining popularity due to their lower cost. However, higher tariffs can increase manufacturing expenses in regions like North America. These external factors require the company to boost internal efficiency and will influence bidding for future tenders. Ashok Leyland's management noted that input costs are increasing, leading to price hikes for commercial vehicles, and plans a significant investment of around ₹5,000 crore for EV battery localization.
Ashok Leyland's Careful EV Funding and Market Rivals
As Switch Mobility pushes for global expansion and operational break-even, Ashok Leyland's funding strategy for its EV arm is a key focus. Ashok Leyland's total CAPEX for FY26 is expected to be ₹800 crore, mainly for capacity upgrades and new engine platforms. A specific ₹1,200 crore is allocated for Switch's scaling in Europe and South Asia. This shows a controlled investment approach, especially as Ashok Leyland aims to maintain dividends and pursue selective acquisitions. The global electric bus market is also becoming more competitive. BYD remains a leader due to its integrated manufacturing, while European companies like Volvo Buses and Asian manufacturers like Yutong are strong contenders. In India, Switch Mobility's market share gains are noteworthy, but it competes fiercely with PMI Electro Mobility and Olectra Greentech, while Tata Motors has seen its market share shrink. The company's export strategy faces geopolitical risks, particularly from the Middle East market, which accounts for 35-40% of its exports. However, the growing average age of commercial vehicles in India could create a significant opportunity for fleet replacements.
Analyst Views on Ashok Leyland's Outlook
Analysts have a cautious but optimistic view on Ashok Leyland. The average 12-month price target from analysts ranges from ₹210 to ₹260, with most brokerages rating the stock 'Hold' or 'Buy'. Motilal Oswal reiterates a 'Buy' rating with a target price of ₹185, considering potential geopolitical risks and expected margin improvements. JM Financial maintains a 'Hold' rating and a target of ₹165. Switch Mobility is targeting free cash flow breakeven by FY27, supported by an order book over 1,350 units. Successfully executing its global expansion, especially from the UAE facility, and managing rising input costs while leveraging operational efficiencies will be key for continued growth.