Ashok Leyland’s Battery Push Could Hit Rs 10,000 Crore If Demand Rises

Ashok Leyland has unveiled plans for battery manufacturing business, which may attract investment of up to ₹10,000 crore over the next few years, depending on the demand for EVs and energy storage devices.

Investment Scope and Phasing

The company is planning an initial investment of close to ₹5,000 crore in the next 7–10 years, though this may rise to around ₹10,000 crore if markets for EVs and energy storage are particularly suitable. In the first phase, with an estimated outlay of ₹500 crore, Ashok Leyland will focus on assembly of battery packs. The second phase could extend into cell manufacturing and localisation of the full battery supply chain within India.

Strategic Partnership and Purpose

Ashok Leyland has inked a long-term partnership with the CALB Group to develop advanced batteries for both automotive and non-automotive applications, including large-scale energy storage systems. The initiative is to support the electric-vehicle operations of Ashok Leyland and its subsidiary, Switch Mobility, while also catering to external OEMs and the growing renewable-energy sector.

Demand Drivers and Market Context

The size and pace depend on the speed at which India's EV ecosystem will evolve. If demand remains moderate, investments may at best be near the base level. On the other hand, if EV penetration and the demand for battery storage accelerate, Ashok Leyland's total investment may go as high as ₹10,000 crores.

Key demand drivers include:

• Captive consumption from Ashok Leyland’s and Switch Mobility’s EV programs.
• Expansion into other categories of mobility such as two-wheelers, three-wheelers, and passenger vehicles.
• Growing requirements from the non-automotive storage sector.
• Government incentives toward localisation of battery manufacturing and clean energy transition.

Location, Scale and Challenges

The company is looking at several options for its battery manufacturing facility, considering logistics, operational costs, scalability, and access to government incentives.

But major challenges are faced on these grounds: infrastructure, sophisticated cell-manufacturing capabilities, a balance between internal and external demand, and, finally, consistent raw material supply and channels of recycling.

Why It Matters

The move marks a key transition for Ashok Leyland, from being only a major commercial vehicle manufacturer to emerging as an important player in the electric-mobility supply chain in India. The company positions itself within the broader energy-storage ecosystem, propelling India to meet its ambitions on reducing import dependency and strengthening its EV industry.

Outlook

If EV demand in India keeps rising sharply, the investment could scale towards ₹10,000 crore, thus setting up one of the most comprehensive battery manufacturing operations in the country. In case the market growth is gradual, the investment would remain closer to ₹5,000 crore. The result will depend largely on market momentum, policy support, and the pace of technological advancement in the EV sector.

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