In response to ongoing economic headwinds across the UK and Europe and a slower-than-anticipated transition to electric vehicles in public transport, the Board of Switch Mobility Limited UK (Switch UK) has approved the initiation of a consultation process with employees, potentially leading to the cessation of manufacturing and assembly operations at its Sherburn facility.
Despite the proposed changes, Switch UK has assured that it will complete all existing orders and continue to provide aftermarket support for vehicles currently in operation. Moving forward, the company intends to cater to demand in the UK and European markets through Ashok Leyland’s alternate manufacturing sites in India and the UAE, when market conditions improve.
At the same time, the company’s Indian arm, Switch Mobility Automotive Ltd (Switch India), is gearing up to expand operations in response to the rapidly growing domestic EV market.
Shenu Agarwal, MD & CEO of Ashok Leyland, explained the rationale behind the move stating that while Ashok Leyland has remained committed to the UK market for over 15 years, the uptake of zero-emission passenger vehicles has been tepid. “It appears to be the right time to reduce exposure and cut down losses in the UK market,”
Conversely, Switch India is witnessing strong momentum, with the company expected to achieve EBITDA breakeven in FY25. With over 1,800 e-Bus orders in hand, volumes are projected to triple by FY26. In the electric light commercial vehicle (e-LCV) segment, Switch India commands over 80% market share in the 2–3.5T category, and is targeting 50–80% volume growth in FY26.
Financial Restructuring
K M Balaji, CFO of Ashok Leyland, noted that the potential closure of the Sherburn site is expected to stem the financial losses of UK operations. “The current cash flow requirements of Switch UK will be met through a GBP 45 million equity infusion approved by Ashok Leyland in February this year,” he said. Switch India is performing better than expected and may not need significant additional capital in the near term, he added.
Ashok Leyland remains confident that the long-term value creation from its EV business will outweigh its investments, especially as India’s electric mobility landscape enters a high-growth phase.
While the UK facility faces uncertainty, the company’s pivot toward India reflects a sharper focus on high-growth markets with greater EV adoption potential.
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