Bajaj Auto announced on Friday that it has restored full production capacity for its Chetak electric scooter following the resolution of supply constraints related to rare earth magnets and other critical components. The company confirmed that production and deliveries resumed on August 20, ensuring adequate inventory for the upcoming festive season.
The automotive manufacturer had experienced significant production challenges in July, with output declining by approximately 47-50% due to shortages of heavy rare earth magnets sourced from China. These magnets are essential components in electric vehicle motors, power steering systems, generators, dashboard displays, and LED lighting systems.
The supply disruption occurred after China implemented stricter export controls on rare earth elements, creating widespread challenges for manufacturers of electric vehicles, wind turbines, and other green technologies. Bajaj Auto was among the first Indian automakers to identify and publicly address these supply chain vulnerabilities, warning of potential production impacts months in advance.
Commenting on the development, Eric Vas, President of Bajaj Auto’s Urbanite Business Unit, said: “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.”
The production disruption affected the broader Indian electric two-wheeler market, with registration data showing declines both year-over-year and month-over-month during July. Bajaj Auto, currently the second-largest electric two-wheeler manufacturer in India, reported a 15% decrease in registrations during July, with 19,650 units compared to June figures.
The Chetak electric scooter has demonstrated strong market performance, with its market share doubling since April of the previous year. The vehicle competes in a growing segment alongside models such as the Ather Rizta, Ather 450X, Ola S1, and TVS iQube.
Other industry players, including TVS Motor, Ather Energy, and Ola Electric, have similarly reported challenges related to heavy rare earth magnet availability and are developing alternative solutions. Ather Energy has indicated potential supply delays of up to seven days to dealers during the July-September quarter.
Bajaj Auto has indicated that it is pursuing two primary strategies to mitigate future supply risks: transitioning from heavy rare earth magnets to more readily available light rare earth alternatives, and developing new magnet technologies that eliminate rare earth dependency entirely.