HomeNewsBusinessMarketsOla Electric, Tata Motors, Bajaj Auto rally up to 6% as China assures addressing rare earth magnet crunch
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Ola Electric, Tata Motors, Bajaj Auto rally up to 6% as China assures addressing rare earth magnet crunch

China accounts for about 90 percent of global production and supply, and shortages have already disrupted output.

August 19, 2025 / 11:06 IST
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The Nifty Auto index is up 11.21 percent since the beginning of the year.
The Nifty Auto index is up 11.21 percent since the beginning of the year.

Indian auto shares extended gains on Tuesday, with Ola Electric, Bajaj Auto, Hero MotoCorp, Hyundai Motor, Eicher Motors and Maruti Suzuki rising up to 6 percent in trade. The Nifty Auto index advanced 1 percent, buiglding on Monday’s near 5 percent jump after reports that the government may cut GST on vehicles to spur demand.

The rally also found support from fresh signals out of New Delhi. According to CNBC TV-18, China’s foreign minister, currently in India for meetings, has assured that Beijing will address key concerns flagged by New Delhi, including the supply of rare earth magnets — a critical input for automakers — and tunnel boring machines.

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For auto manufacturers, the rare earth issue has been particularly acute. China accounts for about 90 percent of global production and supply, and shortages have already disrupted output. Bajaj Auto slashed production of its electric two-wheelers by as much as 50 percent in July, warning that volumes in August and September will also remain constrained.