Mahesh Babu: ‘At Switch, each region will address its own market’

Let’s begin with the pandemic and if it has altered Switch’s long-term goals. What do you have to say? 

The pandemic had a three-fold impact. One, the market was down and it started to pick up now which is good. However, it was challenging for us to set up our international business. Travel was banned then and we had to integrate operations across the UK, India and Spain. 

India is doing well now and we have good numbers — about 10x orders compared to last year. We are progressing well and believe the market side is picking up faster.

The second aspect is the supply chain which is not-so-reliable because of the lockdown in China, challenges due to container availability and much  more. All these issues are putting pressure on investing more inventory.

With things like microchips we have to predict 52 weeks in advance while the tender and supply are less than that. We are protected for this year’s volume supply. Finally, people matter and we have managed to attract good talent.

Can you tell us more about the new facility?

As of now, we are operating in Ashok Leyland’s Encore plant and working on increasing capacity from 2,500 to 5,000 units. We are now looking to invest in a dedicated facility for Switch and will finalise this in a few weeks. In all likelihood, it will be located in the South and we will leverage Ashok Leyland’s Hosur location.

The vendor base is already in place for non-EV parts like wheels, axles, steering etc. We do not want to replicate the whole thing and instead leverage the parent company’s supply chain. We can also synergise operations between the two and get cost benefits for both Switch and Ashok Leyland. This is why we would like to have our new plant close to Leyland’s.

Where is the body of the EiV12 built?

GTVS is building the body in Tiruchi. Unlike diesel, EVs have issues of safety. We have our engineers working on it and 90 percent of needs are met by our own bodybuilders. We are contemplating a dedicated line for bodybuilding in the new facility.

Will Ashok Leyland dealers also handle Switch?

We will talk to them and they can exercise their choice. So far, we have finalised a dealer in Bengaluru and are following up in Chennai and Mumbai. These dealers will maintain the buses and have charging guns at their locations. We are also looking at servicing at the customer’s place and even doing it on the move. 

What is the kind of R&D work happening in India?

The centre of excellence of the EV architecture is in India while advanced engineering happens in the UK. The Warwick facility will be opened and will house application engineering. We will have a similar setup in Spain too since each region needs to address its own market. 

Core engineering will happen in India and advanced engineering overseas as in ADAS which will happen at Warwick. Being a global organisation, if we find some competencies in the UK, we will use them. Right now, we have around 350 people working in R&D across the globe. This will reach 500 by the year-end with India accounting for 50 percent.

What battery technology is used?

We use NMC as it has good energy density. We have a good partner which supplies cells and the battery assembly happens at Ennore. So far, almost nine million kilometres have been completed by our buses in India which gives us more confidence in the product.

How do you ensure light weighting of your products?

We configure them in such a way to ensure this. The double decker bus has a complete aluminium body. The UK  model is lighter by two tonnes compared to competitors. Software applications have ensured that the efficiency of the buses improved by 10-12 percent last year.  

How would you differentiate Switch’s products for India and Europe?

The product is designed, styled and engineered by Switch for electric. All the EV assets of Leyland have been moved here. For example, in EiV12, the powertrain is common for Switch e1 that we have launched. The 650V architecture and EV parts including the battery are common for European and Indian models.

However, the bus by itself must be designed to meet customer requirements of the country. The e1 will have features needed for Europe while the Indian EiV12 will be compatible with the Indian market. Some STU buses need air-conditioning while others do not. In Europe, likewise,  three doors are essential as also an HVAC system etc.

India needs standard floor buses as the low floor options will need to traverse across the landscape where roads are not good. So, we have both products here and can offer what customers want.

What prompted you to set up a unit in Spain?

After Brexit, we needed a footprint in Europe for the left-hand-drive market. The UK facility will address the local market and Spain emerged as a viable option. Government benefits for EV players are impressive and we realised this would be a better option. The focus for the first phase until 2025 is India, UK and Europe and beyond that will be the Americas.

Will Switch handle service and maintenance of these vehicles?

In India, yes, this will be the case. In Europe every e1 sold is an outright purchase. In India, STUs give a GCC (general conditions of contract) where they pay by mile. There is a lot of capital to be invested and the returns will happen over the 10–12-year contract period. OHM India, which will offer the eMaaS service, operates these applications. In short, Switch is the OEM and OHM runs the buses.

Will STUs, therefore, be top priority?

STUs are the primary targets and we believe the market will shift towards private players given that they account for 80 percent today. The Centre is giving a lot of push for EVs in the STU market and private players will also get into this space. We are working on a focused TCO (total cost of ownership) model to make it successful.

Of the 600 orders we have, around 100 are for private players and will be delivered by the year end. These will be used by companies for their staff as well as in public transport. School buses will also be part of this scenario.

Will Switch have a separate control centre?

We are setting up a separate centre with two fronts — one for engineers where they can take data from the product perspective while OHM will look at it from an operational perspective. It is likely to be in our head office.

Since these buses are modular,will this extend to the new eLCV?

LCVs are high volume games and will be similar to the Dost and Bada Dost.  We will be drafting an all-new strategy and are working one the one tonne and over category. It is important to study the market and being nimble and flexible, we can quickly get the right products for the end-user.