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The move affects the Switch Mobility Limited UK (Switch UK) plant at Sherburn-in-Elmet near Tadcaster, which until 2020 was known as Optare, and has customers including First York.
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Parent company Ashok Leyland blames continuing general economic uncertainty in the UK and Europe, plus a slower than expected transition to electric vehicles in public transport for the move.
On Wednesday, the board of directors of Switch Mobility Limited UK (Switch UK) approved the start of a consultation process with employees which could potentially lead to the end of bus manufacturing and assembly at Sherburn-in-Elmet.
Switch UK says it will execute and complete all the orders on hand and will continue to provide aftermarket support for existing vehicles.
The plan is to cater to the UK and Europe markets, when the market recovers, from Ashok Leyland’s alternate manufacturing sites in India and UAE.
At the same time, the Switch Mobility Automotive Ltd, India (Switch India) is planning to double-down on the high-growth India EV market, which is poised to grow multi-fold in the next few years.
Shenu Agarwal, MD and CEO of 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 (electric light commercial vehicles), within the 2-3.5 Tonne segment, the Company’s market share is at 80 per cent plus, with prospects of 50-80 per cent volume growth in FY26”.
K M Balaji, chief financial officer of 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.”
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