Bajaj Auto says rare earth supply eased, co resumes Chetak e-scooter deliveries

Bajaj Auto on Friday said it has resumed supplies of its electric scooter, Chetak, across all dealerships after resolving shortages of rare earth magnets, a critical component for electric vehicles, news agency PTI reported.

The company said production and shipments restarted on August 20, ahead of earlier estimates, enabling it to return to full capacity.

In recent weeks, temporary supply disruptions linked to international component availability had slowed deliveries. "Demand for Chetak remains robust, supplies have normalised, and deliveries against bookings have commenced. We are scaling up production to meet rising demand while staying true to our standards of quality and customer delight," Eric Vas, President – Urbanite Business Unit at Bajaj Auto, said in a statement.

The company added it has now secured sufficient stock of rare earth magnets and other key materials to ensure availability during the festive season.

Shares of Bajaj Auto were down just 0.3% to Rs 8,684.05 apiece on BSE at 2.33 PM.

Rare earth magnets are vital to EV production, and curbs on Chinese exports had hit global automakers, including those in India.

In an interview to The Economic Times, Bajaj Auto Managing Director Rajiv Bajaj had earlier warned that the supply crunch could force the company into a “zero month in August,” as inventories had run out and production was down by half.

“Our component inventory saw us through until June, but we are down by half in terms of production in the current month, and I am afraid that we are looking at a zero month in August as of now,” he had said.

He also underlined the broader implications for the industry, saying delays in supply would hurt not only manufacturers but also suppliers and dealers.

“My greater concern is for our suppliers who have invested heavily in EV development and production as well as for our dealers who have set up exclusive distribution facilities for EVs. These relatively small entrepreneurs and their employees will be hit very hard if the current status quo becomes chronic,” Bajaj had told ET.

Adding to the strain, he noted that delays by state governments in reimbursing EV incentives were impacting cash flows.

In Maharashtra, Bajaj Auto is entitled to a large incentive payout due to its market leadership in electric scooters and three-wheelers. “For over two years now, for reasons that we are unaware of, we have received almost nothing, barring a tiny tranche that came in a couple of weeks ago whereas we have already passed on the entire amount to individual customers,” he had said.