Some 5km outside the city of Valladolid, a new industrial area is being refurbished to welcome a multi-million euro electric bus project and an accompanying research and development (R&D) centre.

The former capital and residence of the royal court, Valladolid was where Isabella of Castile and Ferdinand of Aragon were married, uniting the two families to form present-day Spain. It is now set to become famous for another reason: electric mobility.

Switch Mobility, born of a joint venture between India-based Ashok Leyland’s electric vehicle (EV) arm and UK-based EV company Optare, plans to invest €100m over the next decade in a greenfield project in the Soto de Medinilla industrial area.

Eva Driessen, president of Switch Mobility Iberia, tells fDi that the new company was attracted to Valladolid for the region’s automotive expertise along with the national government’s commitment to invest heavily into the electrification of transport. 

Spain’s bet on EVs

“The pandemic has made Spain reflect on its future model because of its dependence on tourism. Spain had to start to rethink its future plans, and now you see the full commitment of the national and regional governments to become an electric mobility hub,” she says.

Last year, the Spanish government announced it will invest €4.3bn into EV manufacturing and batteries by 2023, financed by EU recovery funds. These will come in the form of grants, subsidies and soft loans. 

Spain is the EU’s second biggest car manufacturer by units produced, after Germany, and Valladolid is one of the country’s most well-established car manufacturing hubs. Renault and Fiat, among other foreign auto manufacturers, already have plants in the city. 

Spanning 28 acres, this new site will be an EV bus plant and R&D centre in the first phase, before adding a battery assembly plant in the second phase — all of it set to be completely carbon neutral. 

Switch also plans to plant 2000 trees for every direct job created. It expects to create a further 5000 indirect jobs in the region.

Attracted to the region for its renewable electricity generation, the company has green plans for its supply chain, as well as its plant.

“We want our supply chain, the production of the plant and the plant itself to be net-zero carbon,” Ms Driessen says. “Where it’s not possible, we will use carbon offset credits to compensate.”

In 2020, 87% of Castilla y Léon region’s electricity came from renewable sources, contributing 49.5% to the total generation mix, according to Spain’s national grid operator. 

Expansion and hurdles

As for the market for these new electric buses, Spain and the EU are Switch’s first port of call. “We see big potential in Spain and other countries in the EU,” she says, citing broader moves in the automotive sector, such as the Italian government’s decision to allocate €800m this year and then €1bn every year until 2030 in incentives to low-polluting cars. Ms Driessen says that Switch is also involved in a tender in Greece.

With production expected to begin within the year, the company will target Spanish cities first and then rural routes in the country, according to Ms Driessen. Spain’s capital, Madrid, aims to remove diesel buses from its fleet of more than 2000 buses as of next year, and has set a target that a third should be electric by 2027. 

But, as with any future-looking project, hurdles to implementation remain, and with EV production, charging infrastructure and high costs are still sticking points.

“Charging facilities are one of the challenges and there still needs to be investment in infrastructure. Fortunately, that’s improving. But of course, there is still the challenge of the price difference between EV buses and diesel buses,” she explains.

Still, the city is buzzing with excitement, Ms Driessen says. “People in Valladolid see it as very important and people are coming by the office on a daily basis. We’ve received over 3000 CVs so we’ve seen a really big interest,” she explains, adding that while on a recent taxi ride, the driver asked her where he could send his CV. 

“The project has been very well received. Now, we need to ensure that we will fulfil our part of these expectations.”

This article first appeared in the April/May 2022 print edition of fDi Intelligence.