India’s leading two-wheeler company Bajaj Auto may halt its EV production in India. As per the company’s Managing Director, Rajiv Bajaj, the shortage of rare earth magnet is effecting the EV production and rising concerns.
Demand of EV in festival season is going to increase but due to this issue Bajaj EV production may be affected. Company has recently dominated both electric scooter and three wheeler segment with its powerful offering like Bajaj Chetak and GoGo models, respectively.
Zero EV Production For Bajaj in August
Bajaj Auto is facing a serious shortage of heavy rare earth magnets, which is badly affecting its electric vehicle (EV) production—especially with the festive season coming up.
In an interview with Shally Seth Mohile, the company’s Managing Director said, “We had enough parts to keep things going until June, but this month, our production has already dropped by 50%.”
He also warned that if the supply issue isn’t resolved soon, Bajaj might not be able to produce any EVs at all in August.
Bajaj expressed concern about the lack of clear and consistent government policies, especially regarding delays in EV subsidy reimbursements at the state level. He mentioned ongoing discussions around schemes like DVA and PLI, particularly when it comes to importing sub-assemblies instead of individual components.
The Managing Director emphasized that the government needs to provide clearer guidelines and maintain consistent policies to prevent more disruptions in the EV industry.
Bajaj pointed out that electric vehicles (EVs) are especially popular in the scooter market, making up around 25% of sales, while EV adoption in cars is still low at just 2%.
He cautioned that demand for EVs might slow down in the future, as customers who’ve gotten used to electric scooters may not want to return to petrol-powered ones.
His bigger worry, however, is for suppliers and dealers who have put significant money into EV-related investments and could be at risk if demand drops.
Bajaj also pointed out that delays in receiving EV subsidies from the Maharashtra government have hurt the company’s cash flow. He mentioned that such delays impact finances significantly, and the state doesn’t compensate for the interest lost during the wait.
The Managing Director cautioned that if the government doesn’t stick to its promises, it could damage Maharashtra’s image as a business-friendly destination.
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