Bajaj Auto warns of EV business hit in Q2 as rare earth magnets shortage bites

Two and three-wheeler Electric Vehicle manufacturer Bajaj Auto Ltd. has warned that its electric vehicle business will lose volumes in the ongoing quarter due to the shortage of rare earth magnets.

Speaking on the company's post earnings press conference, Executive Director Rakesh Sharma said that the rare earth magnets had impacted the EV volumes i the June quarter.

"At this point, we can only deliver 50% to 60% of planned e-scooter deliveries during the second quarter," Sharma said, adding that for electric three-wheelers, the deliveries could be between 70% to 80% of those planned.

Sharma also said that the company is currently evaluating how to re-design the EV motors with light rare earths and that they should be in a position to de-risk he company from rare earth supply crunch by the end of financial year 2026.

Bajaj Auto reported results that were in-line with muted expectations during the quarter. However, the EV business outperformed, and now comprises of more than 20% of the company's overall domestic revenue, in comparison to the early teens that it was during the same quarter last year.

In an interaction with Moneycontrol in April this year, Bajaj Auto Managing Director Rajiv Bajaj had warned that India's electric vehicle industry could come to a complete standstill if China stops the export of heavy rare earth magnets, which are a critical component in EVs.

“If this is true, it would mean that in a matter of weeks, the entire Indian EV industry will grind to a halt," Bajaj had said back then.

Shares of Bajaj Auto ended 0.7% lower after the earnings announcement on Wednesday, at ₹8,175. The stock is down 6.5% so far in 2025.