Electric Two-Wheeler Sales Cool in July as China Curbs Bite

A few months ago, purchasing an electric two-wheeler in India was straightforward. Walk into any dealership, choose your model, complete the paperwork, and ride home the same day. The Indian electric vehicle market operated on this efficiency, supported by a steady supply chain. At the center of this operation was a component: magnets from China.

These rare earth magnets, essential for electric motors, crossed borders regularly, enabling manufacturers to maintain inventory levels and meet consumer demand. The market functioned well, delivery timelines were predictable, and the electric mobility sector continued growing.

However, all that has been upended  by China's new magnet export policy. The country imposed export curbs on rare-earth based products, including compounds and magnets, in April. While pipeline inventories helped cushion the impact till last month, July is turning out to be different, with sales numbers showing a marked downward trend.

"The top variants aren't available as our suppliers haven't been giving us new vehicles for a month. Delivery could take 3-4 weeks," said an executive at a TVS showroom near Thiruvananthapuram. “Our base model scooters have plenty of stock,” he added.

The situation was somewhat similar at a Bajaj dealership in the state. "We have been facing issues with the supply of Chetaks for one and half months," said a salesperson at one of the Chetak showrooms in the same city.

Checks in Mumbai too revealed a similar picture. A TVS iQube showroom dealer in Mumbai confirmed that stocks are in short supply. "There is a waiting time of one and a half months. We are struggling to meet customer demand," he said.

Similarly, checks in Chetak showrooms in Mumbai revealed that some of them did not have any stocks. One Bajaj Chetak showroom said it can deliver the model after one month. Similarly, a Delhi-based dealer of Chetak said it can provide lower variants, but not the top one.

Registration data from VAHAN bears out the customer experience in showrooms, with the largest impact being seen on TVS.

As of July 22, TVS has sold only 11,911 vehicles, according to VAHAN registration data, which excludes the state of Telangana. This works out to per-day sales of 554, or about 30% less than the 793/day sales figure seen in June. At this rate, the company is likely to record July sales of only around 17,174 units against the 23,801 units sold in June, according to VAHAN.

Similarly, the No.2 player, Bajaj Auto, has sold only 13,308 units so far in July, giving it a per-day run-rate of 619 units. While this is better than that of TVS, this too implies a decline of 19.5% compared to Bajaj’s sales in June.

The third player, Ola Electric, has also seen a decline in sales in July, but the reason is less clear. The company has been seeing a decline in its sales for the last several months, and July was no exception. So far in July, the company sold 10,006 units, or 465 units per day.

This represents a fall of 24% from the 612 units/day sold in June. The projected total for the company for July is around 14,427 units, against 18,368 registered on VAHAN in June. The number, as indicated above, excludes data for Telangana.

A channel check with Ola revealed that the company is promising delivery in “2-3 weeks”.

Silver Lining

Meanwhile, the slowdown in the top two players seems to be benefiting the smaller ones, particularly Hero and Ather, who do not seem to be facing the raw material or inventory crunch so far.

Ather’s per-day sales have actually improved in July to 349.2 units from 348.8 units in June, and the company’s projected VAHAN total for the month is around 10,825, against the 10,465 registered in June.

Channel checks revealed that the company has enough stocks of its latest, and hot-selling model, the Rizta. "We have plenty of Rizta models available, but our other specific models are all stocked out. If you book any of those models now, delivery would be at least a month later," said a sales person at a Bangalore showroom. He added that the availability of the older, 450 series scooters varies by location due to supply constraints.

Similarly, sales of Hero MotoCorp’s VIDA seems to be gaining momentum, following the trend seen in recent months. The company’s per-day sales jumped by 7% in July to 274 from 255 in June, putting it on the path to report full-month sales of around 8,500 units. This will be its highest monthly EV sales ever, and a considerable improvement over the previous month’s tally of 7,673 on VAHAN.

With China continuing to delay the export approvals of key raw materials to Indian manufacturers, the episode serves as a reminder of the vulnerabilities in global supply chains and the need for strategic autonomy in critical component manufacturing. It has also spurred innovation in the local EV ecosystem, with some players such as Ola Electric already announced plans to go ahead with ‘rare-earth free’ motors in the coming weeks.