Ashok Leyland’s battery pack manufacturing plans are designed to boost vehicle integration and open new revenue streams, not just cut costs or meet local-sourcing rules, said Chief Executive Officer Shenu Agarwal during the company’s Q1 FY27 financial results announcement.
The Hinduja Group-controlled truckmaker is building a battery pack plant in Tamil Nadu, with production slated to start in 2027. The facility, located in the SIPCOT Pillaipakkam Industrial Park near Chennai, forms the first phase of a broader INR 75 billion commitment by the group.
Speaking to Motoring Trends on the same, Agarwal's said, “Don't look at the battery pack business just from a cost perspective or localisation perspective. The company will meet local-content requirements to the extent that we can make it more efficient.”
He added that the company is designing its own battery packs and battery management systems in-house, which will let the company integrate it better into its vehicles and create a total cost of ownership advantage for the customer.
The strategy also extends beyond Ashok Leyland's own line-up. “We are also evaluating how to supply the solutions to other automotive players,” Agarwal said, while pointing to rising demand for battery energy storage systems as a separate growth avenue.
“This battery pack business has multiple dimensions,” he noted, adding that the initiative is meant to enhance value for truck and bus customers rather than serve as a narrow cost play.
Earnings call
Ashok Leyland posted a record first quarter with strong domestic commercial-vehicle demand helping the automaker withstand disruptions in international markets and broader geo-political uncertainty.
The company achieved its highest-ever first-quarter revenue, profit before tax and net profit, while its cash position improved by INR 14.31 billion from a year earlier, net of dividend, capital expenditure and investments in group companies, Executive Chairman Dheeraj Hinduja said.
“The business environment tested the robustness of our processes and resilience of our teams and partners. Ashok Leyland has come out stronger, achieving new peaks,” Hinduja said.
Domestic commercial-vehicle industry volumes grew in double digits during the quarter with Ashok Leyland's medium and heavy commercial vehicle truck volumes rising 15 percent from a year earlier.
Domestic light commercial vehicle volumes reached a record 18,874 units, while the company’s overall commercial-vehicle volumes increased 10 percent year-on-year, Hinduja said.
The company also maintained its 14th consecutive quarter of double-digit EBITDA margin underscoring its focus on profitable growth, he said.
Non-commercial vehicle businesses including aftermarket, engines and defence also reported healthy performance, Hinduja said. The company continued to invest in products and manufacturing capabilities including the launch of multi-axle trucks equipped with air suspension, which offers higher payload and lower TCO.
Ashok Leyland also launched a 12-meter fuel-cell bus, which Hinduja described as an industry first.
Its electric mobility subsidiary Switch India recently secured an order for 650 electric buses, while the group’s financing businesses, Hinduja Leyland Finance and Hinduja Finance, reported assets-under-management growth of 20 percent and 13 percent, respectively.
The company remains cautious about global uncertainties but is confident of navigating them on the back of the stronger foundation built in recent years, Hinduja said.
“It was satisfying to see the company deliver in the face of challenges presented by global uncertainties. Our performance demonstrated that the business model we have developed can absorb shocks,” he said.
“We remain cautious of global uncertainties but we are confident of navigating these based on the strong foundation we have built over the last few years,” Hinduja added.
The comments come as Ashok Leyland's international commercial-vehicle volumes fell to 2,461 units in the first quarter from 3,011 a year earlier, primarily because of the crisis in West Asia. Growth in South Asia and Africa partly offset the decline with the company seeing stronger momentum from June.
Hinduja said the company’s domestic performance demonstrates the strength of India's commercial-vehicle market and gives it confidence in its ability to sustain growth despite external volatility.
Ashok Leyland’s battery strategy comes as the company strengthens its portfolio amid robust domestic demand and global uncertainty. By developing battery packs and management systems in-house, the automaker aims to capture more value across the electric-vehicle ecosystem, while exploring external customers and energy-storage applications as additional growth opportunities beyond its core vehicle business.
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