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India’s electric two-wheeler market has been rattled by China’s restriction on rare earth magnet exports, with Bajaj Auto’s popular Chetak electric scooter feeling the full impact. Production nosedived in July 2025, despite robust demand, highlighting the electric vehicle (EV) sector’s vulnerability to global supply chains.

• Sharp Decline in Output:
  Bajaj Auto produced only 10,824 units of Chetak in July 2025, a 47% drop from 20,384 units in July 2024 and 41% less than 18,479 units in June 2025.

• Dealer Supply Hit:
  Supply to dealerships also fell by 42% year-on-year, marking the lowest monthly distribution for the year.

• China’s export restrictions have triggered a shortage of rare earth magnets—a vital component in electric motors, dashboard electronics, LED lighting, and other critical EV parts.

• Bajaj was one of the first Indian automakers to warn about this looming crisis. As rare earth supply dwindled from late June, output began shrinking, with July witnessing a production halving.

• Alternative Magnets:
  Bajaj is exploring lighter rare earth magnets and is investing in new magnet technologies that reduce or eliminate dependence on rare earths.

• Production Outlook:
  Although Bajaj expects some improvement in August, production is still projected at only 50–60% of original targets unless the supply crisis resolves.

• TVS and Ather:
  Other major manufacturers like TVS (with 23,742 iQubes produced, up 6% YoY) and Ather Energy (16,148 scooters, up 45% YoY) have not reported similar disruptions, possibly due to diversified sourcing or different magnet tech.