Bajaj Chetak Production Plunges 47% in July Due to Rare Earth Magnet Shortage

Bajaj Auto’s EV arm faced a dramatic production setback in July 2025, with Chetak electric scooter output down 47% year-on-year. The automaker produced only 10,824 units, a sharp fall from 20,384 units in July 2024. This shortage also impacted dealer logistics—wholesales fell 42% to 11,584 units.

Production and Dispatch Numbers

• July 2024 Production: 20,384 units

• July 2025 Production: 10,824 units (–47% YoY)

• June 2025 Production: 18,479 units (–41% MoM)

• Dispatches for July 2025: 11,584 units (–42% YoY)

Why the Big Drop? A Rare Earth Magnet Crisis

The steep decline is being blamed on the worsening shortage of rare earth magnets, a critical component sourced predominantly from China. These magnets are essential for EV motor performance and other components like power steering and dashboard electronics.

Bajaj’s Executive Director, Rakesh Sharma, cautioned that while August won't hit zero production, volumes could still operate at just 50–60% of planned capacity unless the supply issue is swiftly resolved.

To navigate this crisis, Bajaj is actively exploring two solutions:

1. Light Rare Earth Magnets – More available but less efficient

2. Alternative Motor Designs – Rethinking EV motor tech to avoid rare earth dependency

Contrast with Rivals: Market Divergence

Several competitors seem less affected:

• TVS Motor Co: iQube production +6% YoY in July

• Ather Energy: e-scooter output up 45% YoY

• Hero MotoCorp: Vida scooters soared 146% YoY

These contrasting trends may shift market dynamics significantly in the coming months.