Ashok Leyland is laying the groundwork for a deeper push into electric mobility with a phased battery manufacturing strategy that will begin with battery pack assembly before eventually expanding into cell production, reflecting a measured approach to India’s evolving EV market.
The commercial vehicle maker has already conducted the groundbreaking ceremony for its battery pack manufacturing facility at Pillaipakkam near Chennai and expects construction work to commence within the next two months. Commercial production is targeted to begin in the second quarter of the next financial year, Ashok Leyland management revealed at the latest earnings call.
Battery business remains in-house
Unlike several automakers that have spun off battery operations into dedicated subsidiaries, Ashok Leyland’s battery business currently remains within the parent company.
Ashok Leyland Managing Director & Chief Executive Officer Shenu Agarwal, said the company is pursuing a phased investment strategy that aligns manufacturing expansion with the pace of EV adoption in India.
The first phase will focus on battery pack manufacturing for captive consumption and energy storage systems. In the second phase, the company plans to expand capacity to serve external automotive customers, while the third phase will involve entering battery cell manufacturing.
Shenu Agarwal said, “We are starting with pack first. It is a phased approach that we are adopting. We will have to dovetail our own manufacturing investments with the demand scenarios that will emerge in the country.”
EV investments drive capex
The battery facility forms part of Ashok Leyland’s broader investment programme focused on future technologies, alternative powertrains and electric mobility.
The company incurred capital expenditure of ₹1,050 crore during FY26, with a significant portion directed towards new products, future technology development and EV-related initiatives.
The company also invested ₹371 crore in subsidiaries during the fourth quarter, primarily towards repayment of loans in off-tier entities.
Mining and infrastructure demand to power truck growth
While preparing for the electric future, Ashok Leyland remains optimistic about demand in core commercial vehicle segments.
According to the company, implementation of the GST-driven tax reforms initially boosted intermediate commercial vehicle (ICV) demand, creating some margin pressure as heavy-duty trucks typically generate higher profitability.
However, the company expects demand momentum to shift towards heavy-duty trucks, particularly in mining and infrastructure-linked applications.
Shenu Agarwal said tipper trucks, multi-axle vehicles and trip trailers used in mining operations are likely to emerge as the fastest-growing segments this year.
The company expects relatively slower growth in long-haul tractor trailers and ICVs compared to the strong momentum witnessed over the past six months.
Premiumisation remains a focus
Ashok Leyland continued expanding its product portfolio during FY26 with the launch of HIPPO tractors and TAURUS tippers featuring higher power and torque outputs. The company also introduced upgraded 280 HP multi-axle trucks, a new 4.1-tonne Bada Dost light commercial vehicle and the Phoenix LCV for export markets.
Internationally, the company expanded its presence into four new countries during the year.
As Ashok Leyland balances near-term growth opportunities in mining and infrastructure with long-term investments in battery manufacturing and electric mobility, the company appears to be positioning itself for both today’s freight market and tomorrow’s transportation landscape.