The company plans to localise the supply chain for electric vehicles (EVs), particularly in the battery segment, where it may invest about ₹5,000 crore.
Shenu Agarwal, Managing Director and CEO of Ashok Leyland, underlined the strategic shift, stating, “Our next step is basically now looking at localising the supply chain of the 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.”
The company is already working on alternate powertrain technologies and sees localisation as critical to building resilience in the supply chain amid evolving geopolitical challenges. Alongside, Ashok Leyland is also exploring circularity solutions to strengthen sustainability in its mobility offerings.
The battery
segment is expected to be the single largest investment area. While the initial commitment stands at ₹5,000 crore, Agarwal highlighted that actual investment could rise significantly if EV adoption accelerates faster than expected.
On the conventional side, Ashok Leyland expects strong tailwinds from the recent GST rate reductions. Agarwal explained that the reduction in diesel vehicle tax from 28% to 18% will directly improve customer economics, but he stressed that the real boost will come from higher consumption driving freight demand.
“The biggest trigger for us is not the cut in the price, but this freight traffic, which will increase, which will directly impact the industry in terms of needing more trucks and more buses to be able to carry these goods and passengers,” he said.
While precise growth projections for FY26 remain uncertain, Ashok Leyland expects demand to surpass initial industry expectations of 3–5% growth in trucks.
The company has also stepped up its overall capex, with spending in FY26 expected to cross ₹1,000 crore, more than double the levels of recent years, as it prepares for a transition to cleaner and more sustainable mobility.
Also Read | Festive walk-ins rise, but too early to call it a trend, says M&M