Bajaj Chetak Electric Scooters Back In Production As China Lifts Curbs
The assembly lines at Bajaj Auto’s Akurdi plant restarted on August 20, 2025, ending weeks of disruption caused by China’s export restrictions on rare earth magnets. For Bajaj, the resumption of Chetak production means restoring supplies of its popular electric scooter at a crucial time, while also underlining the wider vulnerabilities of the electric vehicle supply chain.
How the Disruption Unfolded
The supply issue began in April 2025 when China introduced licence requirements for seven rare earth elements and finished magnets. These materials are essential for electric motors, and India imports most of them from China.
The restriction caused immediate shortages for several manufacturers, but Bajaj was hit hardest. Its Chetak production dropped nearly 50 percent in July 2025 to just over 10,800 units. Executives warned of a complete production halt in August if supplies did not improve.
Rare earth magnets are critical for electric scooters because they deliver the performance and efficiency needed in compact motors. India sources over 80 percent of its requirements from China, which dominates global processing. This concentration of supply created an industry-wide risk, exposing how dependent even domestic manufacturing remains on foreign inputs.
The Industry Impact
Other manufacturers also faced challenges. TVS, Ather, and Hero Vida reported supply strain, though impacts varied based on their inventories and sourcing. This disruption arrived during a period of strong growth. Bajaj had doubled its EV sales in early 2025 compared to the previous year, with March recording nearly 35,000 units. That momentum was threatened by material shortages, revealing that local assembly alone cannot offset the absence of critical components.
Government schemes like the Production Linked Incentive (PLI) encourage domestic manufacturing, but critical elements such as rare earth magnets still come from outside India. The experience highlighted how a single policy shift abroad could affect an entire industry’s output.
Diplomatic Breakthrough and Recovery
The situation improved after talks in July 2025 between visiting Chinese Foreign Minister Wang Yi and India’s External Affairs Minister S. Jaishankar. China agreed to resume supplies of key minerals, including rare earths, in time for India’s festive season. This assurance allowed Bajaj to restart its lines earlier than expected. Company officials confirmed deliveries against bookings were underway by late August.
Production is ramping up quickly. Bajaj expects to produce 15,000 units in August and scale to 40,000 units in September as materials flow normalise. Dealers are receiving fresh stock, and waiting periods should shorten. Prices remain stable, with the Chetak range continuing between Rs 1.02 lakh and Rs 1.35 lakh ex-showroom.
Lessons From The Crises
The crisis accelerated Bajaj’s focus on technology and sourcing. Engineers are working on designs that reduce or replace heavy rare earth elements with lighter or alternative materials. Discussions about rare-earth-free motor technologies are now more urgent. Bajaj is also exploring suppliers in countries like Vietnam, Australia, and Brazil, though developing new supply chains will take time and investment.