Bajaj Auto resumes Chetak e-scooter supplies after securing sufficient rare earth magnet

Bajaj Auto on Friday said it has resumed supplies of its electric scooter Chetak across all dealerships after overcoming supply constraints caused by global rare earth magnet shortages.

In recent weeks, temporary supply constraints linked to international component availability had moderated deliveries.

The sustained and growing demand for Chetak added further pressure on supply, Bajaj Auto said in a statement.

Production and shipments recommenced on August 20, marking a faster-than-anticipated return to full capacity, Bajaj Auto said, adding that it has secured sufficient supply of rare earth magnets and other key materials to ensure availability during the upcoming festive season.

“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,” Bajaj Auto President - Urbanite Business Unit, Eric Vas, said.

The company’s electric vehicle (EV) production had been severely impacted by China’s export restrictions on rare earth magnets, a critical component in electric motors.

Bajaj Auto Managing Director Rajiv Bajaj had last month cautioned that EV output could drop to zero in August as component inventories ran out.

“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,” Bajaj had told The Economic Times.

China, which accounts for over 90% of global rare earth processing, imposed export licence requirements for seven rare earth elements and finished magnets in April, tightening supply chains worldwide.

India sourced over 80% of its 540 tonnes of magnet imports from China in the last fiscal.

The restrictions had hit automakers globally, with larger players like Bajaj Auto more severely impacted than smaller, low-volume manufacturers.

Meanwhile, Chinese Foreign Minister Wang Yi, during his visit to India this week, assured External Affairs Minister S Jaishankar that Beijing would resume supplies of fertilisers, rare earth minerals and tunnel boring machines, according to media reports.