Bajaj Chetak Entry-Level Variant Production Due To Shortage Rare Earth Magnets
Bajaj has delayed the launch of its new entry-level variant of the Chetak due to critical supply chain issues. A shortage of rare-earth magnets, essential for electric motors, is causing the delay. These magnets are primarily sourced from China, which suspended exports in April.
Expected Launch Delayed
The entry-level Chetak was expected to launch in June, but now has no confirmed release date. Bajaj is currently focusing on stabilising production for its existing electric scooter line-up. The company aims to avoid further disruptions by prioritising ongoing production.
China dominates the global rare-earth refining industry, and its export suspension caused ripple effects across the EV sector. The shortage began to impact production in late June, resulting in a 50% drop in July. August also appeared uncertain, raising fears of a total production halt.
Bajaj managed to maintain partial output by switching to light, rare-earth magnets in its motor designs. This move helped stabilise production at 50% to 60% of planned capacity. Though reduced, the output has prevented a full-scale production shutdown.
The production slump faced by the company is reflected in the hit taken by sales figures. Bajaj’s EV registrations in July dropped 15% to 19,650 units. It remains the second-largest EV manufacturer in India despite the decline.
Similar supply disruptions are also being dealt with by other manufacturers like TVS, Ola Electric, and Ather Energy. Ather has already issued warnings about delivery delays of up to a week. The entire Indian EV industry is feeling the pinch from the rare-earth crisis.
To address this issue long-term, Bajaj is pursuing two key strategies for future stability. First, it is an increasing use of light rare-earth magnets. Second, it is developing next-generation motors that require no rare-earth materials.
Bajaj considers these initiatives crucial for its future electric vehicle expansion in a volatile global supply environment. Executive Director Rakesh Sharma emphasised the importance of these initiatives for long-term scale-up. Innovation in motor design could reduce reliance on constrained global resources.
Outlook
Despite the current challenges, demand for the Chetak electric scooter remains strong across India. The new 35 Series platform, launched in December 2024, continues to generate customer interest. Resolving the ongoing supply issues is necessary for meeting that demand.
