Bajaj Auto’s Chetak EV Output Falls 47% Amid Rare Earth Magnet Shortage

Bajaj Auto’s EV division has hit a major roadblock, with Chetak electric scooter production plunging 47% in July 2025. The company manufactured only 10,824 units compared to 20,384 a year earlier, while wholesales dropped 42% to 11,584 units. Even on a monthly basis, production fell 41% from June’s 18,479 units.

The sharp decline stems from a severe shortage of rare earth magnets, a crucial material largely imported from China. These magnets are vital for EV motors, power steering, and dashboard electronics. Bajaj’s Executive Director, Rakesh Sharma, warned that while production won’t completely stop in August, volumes may remain at just 50–60% of planned levels unless supplies stabilize.

To overcome the crisis, Bajaj is exploring alternatives such as light rare earth magnets—more available but less efficient—and developing new motor designs that reduce reliance on rare earths.

Meanwhile, competitors are seeing growth. TVS Motor’s iQube production rose 6% year-on-year in July, Ather Energy boosted output by 45%, and Hero MotoCorp’s Vida scooters surged 146%. This divergence highlights how Bajaj’s supply chain troubles could reshape the competitive landscape in India’s EV two-wheeler market.