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Bajaj’s EV production in July likely to be hampered due to lack of rare earth metals

The shortage of rare earth metals may impact Bajaj’s electric vehicle manufacturing, citing the company’s executive director, Rakesh Sharma, Autocar Professional reported.    According to the report, if the supply bottlenecks persist, the production of Bajaj’s electric vehicle motors can be hampered. The disruption in supply has arisen from China’s new policy of asking for a declaration by importing companies, assuring a non-military usage of the rare earth materials.    Sharma, during a media briefing, said, “The rare earth situation is a very difficult one. An onerous process has been hammered together for import approvals. This involves end-use declaration about the usage of the rare earth not being in military use. And requires certification from multiple Indian ministries, the Chinese embassy, and ultimately, export clearance from Chinese authorities,” Autocar Professional reported. The Indian automobile sector has already filed around 30 applications, but no clearances have been obtained as of yet.   According to the report, Sharma added, “Chinese authorities have said it could take 40 to 45 days from the time an application is made, but that loop has not yet got closed”.    Further, he said, “As we speak, supplies and stocks are getting depleted. And if there is no relief and there are no shipments, then July production will get seriously impaired. I think such is the case with the entire auto industry,” the report added. Meanwhile, highlighting the lack of an immediate possible substitute, Sharma mentions that Chinese imports account for nearly all of the rare earth magnet supply chain used by the automotive sector. Although rare earth minerals exist in India and other countries, Sharma clarified that the process of extracting and purifying them calls for capital and expertise.   An executive from Bajaj Auto acknowledged that the situation is a financial danger to the electric vehicle market. However, Sharma said he hoped that either the existing clearance procedures would produce results quickly or that new supply chains and technology would emerge over the year. "Our goal is to achieve some mitigation through process simplification, execution, and alternative development," he stated.   SIAM and ACMA have recently urged the Indian government to press Beijing to release rare earth magnet shipments and expedite approvals. Initially perceived as a reaction to U.S. tariffs, China, which produces more than 90% of these magnets worldwide, enacted new regulations requiring import permits in April. But now, the effect is spreading throughout the world's automobile supply networks.