Bajaj Auto saw production of its Chetak electric scooter slump by 47 percent year-on-year (YoY) in July 2025, with just 10,824 units manufactured versus 20,384 units in July last year. The steep drop is a direct fallout of the ongoing shortage of heavy rare-earth magnets sourced from China.
- Bajaj Chetak output drops to nearly half of July 2024
- Shortage of heavy rare-earth magnets from China continues to hit production
- Rivals report growth in July despite supply pressures
Chetak production falls sharply in July
Rivals remain unaffected for now
On a month-on-month basis, too, output has sharply fallen – down 41 percent from June’s 18,479 units, which itself was 23 percent lower than May’s tally of 24,106 units. With production slowing, Bajaj’s wholesales to dealers also took a hit, falling 42 percent YoY to 11,584 units (July 2024: 20,114 units).
This supply-chain crisis, which Bajaj had flagged earlier this year, is now beginning to materially impact operations. Executive director Rakesh Sharma had cautioned in June that production could fall by half in July and potentially go to zero in August if supplies did not improve. He later confirmed that while output in August will recover slightly, it is still expected to be only 50-60 percent of planned volumes.
Rare-earth magnets are critical for EV motors and several other components, such as generator systems and LED lighting. Bajaj Auto is working on alternatives, including using light rare-earth magnets that are more readily available and developing new magnet technologies that reduce reliance on these materials. The company had also initiated localisation efforts earlier, but the sudden tightening of Chinese supplies has escalated the disruption. Recently, Bajaj even pushed the launch of the entry-level Chetak due to this very issue.
Interestingly, Bajaj’s rivals appear to have been less affected in July. TVS Motor Co. produced 23,742 iQubes (up 6 percent YoY), Ather Energy rolled out 16,148 scooters (up 45 percent), and Hero MotoCorp manufactured 11,314 Vida e-scooters (up 146 percent), most of them the new Vida VX2. Currently, these OEMs haven’t faced a slowdown, but TVS – the EV market leader and the largest player in the electric scooter space – has also confirmed during its recent investors’ call that it is working on alternate magnet technologies that would eliminate reliance on Chinese rare-earth supplies.
For buyers, this slowdown could mean longer waiting periods for the Chetak in the coming months. While rivals like TVS and Hero are currently managing to maintain growth, they too are exploring alternatives to reduce their dependence on Chinese rare-earth supplies. If the shortage persists, the impact could eventually spread across the EV two-wheeler market, but for now, Bajaj remains the most affected.
Hormazd Sorabjee
Anurag Chaturvedi
