The electric vehicle industry is grappling with supply chain issues, as China’s restrictions on rare earth magnets significantly impact production. Bajaj Auto, a prominent electric two-wheeler manufacturer, is particularly affected, with its Chetak scooter production facing a steep decline. The company’s production output for Chetak scooters dropped by 47% last month compared to July 2024, according to SIAM data. The shortage of rare earth magnets, crucial for EV components, is the primary cause.
To combat the crisis, Bajaj Auto is exploring solutions like using alternative magnet materials and developing new magnet technologies that reduce or eliminate the need for rare earth elements. Despite the challenges, other manufacturers are not facing the same production issues. This situation underscores the strategic importance of diversifying supply chains and investing in research and development to ensure the long-term sustainability of the electric vehicle sector.