Ashok Leyland & CALB: ₹5000 Cr Deal for 20 year to Localize EV Battery Manufacturing in India

Ashok Leyland, India's second-largest commercial vehicle maker and the flagship of the Hinduja Group, has announced a landmark long-term exclusive partnership with China’s CALB Group (China Aviation Lithium Battery), the world's third-largest battery manufacturer. This alliance is designed to accelerate the localization of advanced battery technology and secure a domestic supply chain for India's growing electric vehicle (EV) market.

Investment & Strategic Vision for the EV Ecosystem

The partnership underpins a massive financial commitment and a strategic vision to position Ashok Leyland as a core player in India’s electrification efforts, extending far beyond its own fleet.

Financial Commitment and Investment Scope

Ashok Leyland plans to invest over ₹5,000 crore (₹50 billion) across the next 7-10 years into the development and manufacturing of next-generation batteries. This investment is directed toward localizing the battery supply chain and establishing R&D centers.

Multi-Sector Focus

The new battery business is strategically designed for phased expansion :

• Initial Focus :

Automotive applications, primarily supplying batteries for Ashok Leyland's and its subsidiary Switch Mobility’s electric vehicle portfolio (trucks and buses).

• Expansion :

The business will subsequently cater to non-captive demand across the entire automotive sector and the rapidly expanding energy storage systems (ESS) market, including grid-scale solutions.

The Phased Localization Strategy

The 20-year partnership outlines a measured, step-by-step approach to master lithium-ion technology, prioritizing robust process development over rapid scale-up.

Phase 1 : Importing and Learning

• CALB will initially supply lithium-ion cells, which are the most technology-intensive components.

• Ashok Leyland will focus on assembling these cells into complete battery packs in India, gaining expertise in crucial areas like thermal management, software integration, and packaging under CALB’s guidance.

• This phase ensures reliability and competence building before scaling up complex manufacturing.

Phase 2: R&D and Technology Hubs

• The company plans to establish a Global Centre of Excellence for research and development.

• This hub will serve as a center for innovation in battery materials, recycling processes, battery management systems (BMS), and advanced manufacturing techniques.

Long-Term Goal : India-Made Cells

• The ultimate aim of the collaboration is to develop the capability to design and manufacture lithium-ion cells locally in India.

• This crucial milestone of domestic cell production is anticipated to be achieved within five years or more, underscoring the patient, long-term commitment required for mastering core battery technology.

Industry Impact & Alignment with National Goals

This strategic move by one of India’s largest conglomerates has significant implications for the country’s clean energy transition.

Bridging the Technology Gap

The partnership is critical for addressing the prevalent lack of domestic expertise in battery technology, which CEO Shenu Agarwal candidly referred to as the EV's "black box." By leveraging the expertise of a world leader like CALB, Ashok Leyland aims to accelerate the adoption of EVs and reduce reliance on imported components.

Strengthening Sustainable Mobility

The investment is aligned with the Indian government's vision of creating a sustainable and green economy. By localizing the battery supply chain, the deal aims to :

• Accelerate the adoption of electric vehicles across all segments.

• Reduce India's dependence on fossil fuels and foreign supply chains.

• Position India as a key player in the global electric mobility and energy storage industry.