Ashok Leyland shifts European electric bus production to UAE, expanding regional manufacturing hub

Ashok Leyland is gearing up to relocate part of its electric bus production destined for Europe to its plant in Ras Al Khaimah, in the United Arab Emirates. The company’s leadership says this move is scheduled to happen within the next 12 months. As reported by The New Indian Express, MD and CEO Shenu Agarwal confirmed the plan, highlighting the UAE facility as a regional hub for manufacturing battery-electric buses aimed at the European market.

This decision further emphasizes the growing strategic importance of the Gulf plant for the Hinduja Group’s commercial vehicle business. The Ras Al Khaimah plant, which was set up in 2008, already acts as the company’s certified local bus manufacturing plant across the Gulf Cooperation Council (GCC). Company materials point out that the facility has a significant scale: it has supplied buses throughout Africa and other regions, and is believed to have an installed capacity of several thousand units each year. Ashok Leyland’s own press release mentions a capacity of 4,000 buses annually and describes the site as being central to the company’s export activities. Some industry reports also note that the plant has, at times, been described as capable of producing up to 6,000 units, which highlights the variations in figures cited across different sources.

The move to shift European production to the UAE aligns with broader efforts within the group to optimize and consolidate manufacturing capabilities. Khaleej Times reports that Switch Mobility, Ashok Leyland’s electric bus arm, which was formerly linked to UK operations, is also relocating its production from the UK to Ras Al Khaimah. The reasoning given is that the UAE offers a more cost-effective manufacturing environment, along with easier access to European and Gulf markets. The existing Ras Al Khaimah plant will be expanded to handle the assembly of electric buses, the report notes.

Switch Mobility’s product lineup and ambitions in Europe haven’t been entirely steady, though. Sustainable-Bus.com and others have pointed out that Switch introduced two electric bus models in late December 2024, called EiV12 and E1, with the latter apparently targeting European markets. But these models come with their own backstories: the E1 made its debut in 2022 but never officially reached the European market, and the EiV12 was also publicly showcased back in 2022. It’s still unclear whether the latest versions are redesigned or just relaunches of the earlier models, there’s some ambiguity there.

In terms of exports, Switch Mobility has been making decent progress from other bases. The New Indian Express reports that buses from India have been shipped to Mauritius, and there was a recent order of 45 electric buses in Bhutan. Domestically, Switch India remained quite active between April and December 2025, selling 850 buses and 1,200 electric light commercial vehicles, with an order backlog of about 1,350 units. Over 240 buses have already been delivered to Delhi alone. Pretty impressive figures, right?

Funding and cash flow are also areas of interest for the company’s EV plans. Ashok Leyland is reportedly exploring external finance options for its EV-focused division, OHM Global Mobility. Agarwal told The New Indian Express that they’ve invested Rs 300 crore into OHM so far, and set aside another Rs 300 crore, bringing internal funds committed to Rs 600 crore. He also mentioned that management is considering additional routes to raise capital if needed.

Financial results from the company remain solid, with continued profitability and increased export figures. In the third quarter, Ashok Leyland reported a profit of Rs 796 crore, which is roughly a 4 percent rise compared to the previous year. Export shipments increased to 4,965 units from 4,151 units earlier, showing a clear push into overseas markets.

On the global scene, Chinese and European EV bus manufacturers, along with regional assemblers, have been reshaping supply chains. For Ashok Leyland, focusing electric bus production at Ras Al Khaimah could cut down on logistics costs and customs issues when shipping to Europe. Khaleej Times highlights that the UAE’s competitive manufacturing environment, along with its logistical advantages for routes into Europe and the Gulf region, makes it a pretty handy location for this purpose.

Back in the Emirates, the company is also expanding its local footprint. Both Khaleej Times and Ashok Leyland’s official statement talk about a significant local order: the firm secured 1,400 school buses in the UAE, marking its largest deal of this kind in the country. These buses, which include 55-seater and 32-seater models, will be produced at Ras Al Khaimah. Al Naboodah Vehicles adds that nearly half of the plant’s output has historically gone to export markets like Peru, Chile, Russia, and Ukraine, indicating that the facility plays a dual role, serving both domestic and international markets.

This development’s notable for regional climate and mobility advocates. Moving EV bus manufacturing into the Gulf directly supports local decarbonization efforts in public transport. It could also influence procurement trends across the Gulf and Mediterranean regions, potentially reducing delivery times and allowing variants better suited to local climates and regulations.

Of course, some questions remain unanswered. For example, it’s not clear whether the newly announced E1 model intended for Europe is significantly different from the version that was showcased in 2022. Also, once European shipments start, it’s uncertain how the production volumes will be divided between the UAE facility and other Ashok Leyland or Switch Mobility locations. Their ongoing efforts to secure external funding for OHM suggest that further investments in product development and scaling-up are very likely.

Overall, as Ashok Leyland moves to broaden its electric bus manufacturing footprint, the Ras Al Khaimah plant is poised to become a bigger part of supplying low-emission public transportation to Europe and beyond. According to the company and media comments, the transition to local production in the UAE should be completed within the next year, with significant implications for supply chains, regional industry policies, and overall decarbonization strategies. It’s pretty interesting, right?