Bajaj Auto may face ‘zero month’ for EV production in August due to rare earth magnet shortage: Report

To qualify for incentives under the auto PLI programme, EV manufacturers are required to meet progressively increasing DVA targets over time.

Bajaj Auto may record a “zero month” in August for its electric scooter Chetak and electric three-wheeler GoGo because of a severe shortage of rare earth magnets, Managing Director Rajiv Bajaj said in an interview, as cited by Economic Times.

This development would make Bajaj the first automaker to halt production due to China’s export restrictions on the critical component, the report noted.

According to Economic Times, the scarcity triggered by China’s move has already forced Bajaj Auto, India’s second-largest electric scooter maker by volume, to halve EV output in July. The company, however, managed to maintain full production in June by relying on existing inventory, Bajaj told the publication.

China remains the world’s leading supplier of rare earth magnets, which are essential not only for electric vehicles but also for internal combustion engine (ICE) models, renewable energy infrastructure, consumer electronics, defence systems, and aerospace applications.

Bajaj urged the government to provide greater clarity to all stakeholders on the evolving supply situation and the near-term outlook for the auto industry, Economic Times reported.

On whether the industry’s efforts to seek relaxation of domestic value addition (DVA) norms under the production-linked incentive (PLI) scheme had yielded results, Bajaj said there has been no conclusive update from the concerned ministry or regulatory authorities, according to Economic Times.

To qualify for incentives under the auto PLI programme, EV manufacturers are required to meet progressively increasing DVA targets over time.