Switch Mobility factory could close
Switch Mobility‘s Sherburn-in-Elmet manufacturing facility could close.
The Board of Directors of Switch Mobility Ltd UK has approved starting a consultation process with the employees which could potentially lead to cessation of its manufacturing and assembly activities at the Sherburn facility. The move is being taken over what the business describes as continuing general economic uncertainty faced in both the UK and Europe, and slower than expected transition to EVs in public transport.
Switch UK is to execute and complete all the orders on hand and will continue to provide aftermarket support for the existing vehicle parc. The plan is to cater to the UK and Europe markets when market recovers, from Ashok Leyland’s alternate manufacturing sites in India and UAE.
Despite the news, the Indian branch of the business, Switch Mobility Automotive Ltd, is planning to double-down on what it describes as the high-growth India EV market, which is expected to grow multi-fold in the next few years.
Switch Mobility is a subsidiary of Indian automotive giant Ashok Leyland. It was formerly known as Optare.
“This seems to be the right time to cut down losses in the UK market” – Mr. Shenu Agarwal, MD and CEO, Ashok Leyland
Mr. Shenu Agarwal, MD and CEO, Ashok Leyland, said: “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.
“On the other hand, the EV bus market in India is doing exceptionally well. Switch India is likely to achieve EBITDA breakeven in FY25, and is hoping to treble volumes in FY26, on back of 1800+ e-Bus orders in hand. In e-LCVs, within the 2-3.5T segment, the Company’s market share is at 80% plus, with prospects of 50-80% volume growth in FY26.”
“The potential cessation of manufacturing activities is expected to mitigate the losses of UK operations” – Mr. K M Balaji, Chief Financial Officer, Ashok Leyland
Mr. K M Balaji, Chief Financial Officer, Ashok Leyland, said: “The potential cessation of manufacturing activities is expected to mitigate the losses of UK operations. The current cash flow requirements of Switch UK will be borne out of £45m of equity infusion already approved by the Board of Ashok Leyland in February this year. Switch India is doing much better than expected and should not require significant equity infusion in near future. On an overall basis the value accretion from Switch EV business is expected to be much more than the investments made in these entities.”