Rare Earth Magnet Ban: Bajaj Chetak, TVS iQube And Ather Electric Scooter Production To Be Cut; Ola Unaffected

Some of India’s top electric two-wheeler makers - Bajaj Auto, Ather Energy, and TVS Motors - are facing major supply chain issues due to a shortage of rare earth magnets from China. The problem is in its fourth month now. It finally seems to be forcing these companies to cut production, which could slow down the fast-growing EV market.

Heavy rare earth (HRE) magnets are a key component in electric vehicle motors. Without a steady supply, EV production becomes difficult. Rajiv Bajaj warned about this in an interview nearly 2 months ago, stating that China could bring the entire Indian electric vehicle industry to a halt within a matter of weeks.

Bajaj Auto is expected to reduce its production by almost 50%, while Ather Energy is planning a smaller cut of 8–10%. TVS Motor, which has led the EV sales charts for the past three months, is also expected to scale back its output. Even TVS Chairman and MD Sudarshan Venu had warned about just this soon after Mr. Bajaj went public with the China threat to the Indian electric vehicle industry.

“These disruptions in the EV supply chain, especially in magnet availability, are continuing to pose challenges in the short to medium term,” said a TVS Motor spokesperson. The company added that it is actively working on solutions.

Ola Electric, on the other hand, appears to be unaffected for now. A spokesperson said Ola had stockpiled rare earth magnets in advance and will continue production as normal.

In fact, people familiar with the company’s plans say Ola might even slightly increase its production in July. The company reportedly has enough magnet inventory to last another five to six months.

All four brands - Bajaj, Ather, TVS, and Ola - account for nearly 80% of the electric two-wheelers sold in India. The supply crunch could therefore affect a large part of the EV market if the issue continues.

Rakesh Sharma, Executive Director at Bajaj Auto, confirmed that the company’s Chetak line has already started facing disruptions. “Our R&D and procurement teams are working on alternatives, which are now in advanced stages of development,” he said.

The Indian automobile industry and the central government are holding talks with China to restart the flow of rare earth materials. The Indian government has sent a high level delegation comprising officials and automotive industry representatives to China in order to help resolve the impasse.

The government and the automobile industry are also said to be reaching out to other countries such as Vietnam, Indonesia, and Japan to explore alternative suppliers. So far, there has been little progress.

“There has been no breakthrough in resuming magnet imports from China,” a senior industry official said. “Bajaj, TVS, and Ather are the first to feel the pinch, but if this continues, the entire segment could be affected.”

In June, the Society of Indian Automobile Manufacturers (SIAM) had warned that manufacturers may soon have to cut production due to falling inventories. Even car makers such as Maruti Suzuki, Mahindra and Toyota have flagged this issue with only Tata Motors doing an Ola Electric, and suggesting that they remain unaffected by the Rare Earth Magnet shortage artificially caused by China through the import ban.

This disruption comes at a time when the EV two-wheeler market is growing rapidly. According to government data from the Vahan portal, sales of electric scooters and bikes jumped 34% in the first quarter of FY26, reaching nearly 3 lakh units.

If the rare earth magnet shortage continues, the electric vehicle boom in India could hit a serious roadblock just as it's picking up speed.

Via ETAuto