In Short : Due to a serious scarcity of rare earth magnets, a crucial component of EV motors, Bajaj Auto has announced that it will only deliver 50–60% of its targeted electric scooter volumes in Q2 2025. It is anticipated that deliveries of their electric three-wheelers will only fall between 70 and 80 percent of the aim.
Key Information from the CFO
Dinesh Thapar, CFO of Bajaj, stated that the April export embargo by China, which provides more than 90% of the world’s output of rare-earth magnets, is the cause of the disruption in the rare-earth supply. Bajaj intends to investigate alternate suppliers and develop motors utilizing Light Rare Earth (LRE) rather than heavy rare-earth minerals in order to lessen the inconvenience. By March 2026, the company hopes to eliminate this dependency and lower supply chain risks going forward.
Operational Implications & Future Plans
The deficit occurs right before India’s holiday sales, which are typically at their highest. Bajaj cautioned that volume restrictions may cut Christmas delivery goals by around 50% even if supply improves. As a result, the business has established a specialized team to handle tactical fixes including motor redesigns and alternative sourcing techniques.
The Last Shot
The delivery failure of Bajaj Auto reveals a serious supply chain weakness in the Indian EV market. Dependencies on rare-earth minerals present threats to the country’s energy transition as it speeds up, affecting not only car production but also related solar energy infrastructure, clean tech jobs, and the larger movement toward sustainable energy systems.
