Bajaj, Ather & TVS May Cut E-Scooter Production Due to Rare Earth Magnet Shortage

Table of Contents

India’s electric two-wheeler industry is facing an unexpected challenge that could disrupt production schedules for some of the country’s most prominent EV brands — Bajaj Auto, Ather Energy, and TVS Motor Company. The issue? A shortage of heavy rare earth (HRE) magnets sourced from China.

These magnets are critical components used in the electric traction motors that power electric scooters. For the past four months, supply disruptions from China have slowly started affecting Indian EV manufacturers. Now, those disruptions are translating into actual production cuts.

Why Are HRE Magnets So Important?

HRE magnets, typically composed of elements like dysprosium and terbium, are essential for the high-performance electric motors found in e-scooters. Their heat resistance and magnetic strength make them ideal for compact and efficient powertrains. Without a steady supply, production lines grind to a halt.

A spokesperson from TVS Motors explained, “The disruptions in the EV supply chain, particularly concerning magnet availability, continue to pose challenges in the short to medium term. We are working actively to mitigate the prevailing challenges.”

Who’s Affected and How?

Among the three major players, Bajaj Auto appears to be the worst hit. The Pune-based company has already started reducing production by 50%, particularly on the Chetak electric scooter line. Bajaj’s Executive Director Rakesh Sharma confirmed that their R&D and procurement teams are already working on alternate sourcing and design solutions that are currently in advanced stages.

Ather Energy, another Bengaluru-based EV manufacturer, is expected to reduce its production by 8–10%. While they haven’t issued a direct response, the slowdown in output aligns with ongoing component supply issues.

TVS Motor, which has been the sales leader in the electric two-wheeler space over the past three months, has also opted to cut back production volumes in order to cope with the limited availability of these magnets.

Also Read: Mahindra Thar, XUV700 Facelifts & All-Electric XEV 7e Coming Soon: What to Expect

Ola Electric Remains Unaffected (For Now)

Interestingly, Ola Electric — another major EV player — claims it will not be affected by the HRE magnet shortage. The company says it has stockpiled enough magnets to sustain production for the next 5–6 months and may even increase production in July.

“There is no impact on production because of the rare earth magnets,” said an Ola Electric spokesperson, though they declined to share further details. It’s worth noting, however, that Ola has seen a significant dip in sales recently and has lost its segment leader title to Bajaj and TVS.

Government and Industry Look for Alternatives

Top-level officials from the Indian government are in talks with Chinese counterparts to resolve the issue and resume normal supply flows. Meanwhile, EV manufacturers are exploring alternative sources in countries like Vietnam, Indonesia, and Japan.

With Bajaj, Ather, TVS, and Ola collectively accounting for eight out of every ten e-scooters sold in India, the outcome of this supply chain disruption could shape the EV market significantly in the coming months. Whether through alternate sourcing, design modifications, or further production cuts, the industry is now at a crucial turning point.