Ashok Leyland to Invest ₹5,000 Crore in EV Battery Localisation

12 Sep 2025 , 12:14 PM

Ashok Leyland, India’s second-largest commercial vehicle manufacturer, is stepping up investments to prepare for the industry’s transition to electric mobility, with a strong focus on localising the EV supply chain.

The company is planning to invest around ₹5,000 crore in the battery segment, the single largest cost component in electric trucks and buses. “Our next step is basically now looking at localising the supply chain of electric vehicles… 40 to 50% of the cost of an electric truck or a bus comes from the battery. It is extremely important that we reduce that cost to move the adoption of trucks and buses much faster than what it is,” said Shenu Agarwal, Managing Director and CEO of Ashok Leyland.

Localisation and Sustainability Push

Agarwal emphasised that localisation is critical for building a resilient supply chain amid shifting global dynamics. The company is also exploring circularity solutions to strengthen its sustainability efforts. While the initial ₹5,000-crore commitment is focused on batteries, Agarwal indicated that the investment could increase sharply if EV adoption outpaces expectations.

Conventional Business Outlook

On the traditional side, Ashok Leyland expects demand for diesel vehicles to benefit from the recent cut in GST rates, with tax on diesel trucks reduced from 28% to 18%. While the rate cut improves customer economics, Agarwal noted that the bigger driver will be a rise in consumption, which will boost freight traffic and, in turn, vehicle demand. Although the industry had projected 3–5% growth in trucks for FY26, the company expects actual demand to exceed those estimates.

Higher Capex for FY26

Ashok Leyland has also stepped up its overall capital expenditure, with FY26 capex expected to cross ₹1,000 crore more than double recent levels as it accelerates investments in clean technologies and sustainable mobility solutions.

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