Bajaj Auto has pushed back the launch of its new entry-level Chetak EV as it battles supply chain issues caused by a shortage of rare earth magnets from China. The company is currently prioritising recovery of production for its existing electric line-up before introducing any new models.
- Entry-level Chetak EV launch deferred as Bajaj tackles parts shortage
- Heavy rare earth magnet supply crunch forces 50 percent production cut
Entry-level Chetak on hold for now
Planned mid-2024 launch postponed
Bajaj had announced plans earlier this year to introduce a more accessible version of its Chetak electric scooter, aimed squarely at the entry-level EV segment. The model was expected to arrive around June 2024, but the launch has now been put on hold as the company battles supply chain disruptions caused by a global shortage of heavy rare earth magnets.
These magnets are a critical component in the permanent magnet motors used in electric two-wheelers, and the supply bottleneck has affected several OEMs across the globe. China— which accounts for the majority of rare earth refining capacity suspended exports in April, leading to ripple effects across the industry.
EV output hit hard in July
Partial recovery possible in August and September
The production shortfall began in late June and led to a sharp 50 percent drop in Bajaj’s EV output in July. While an even grimmer picture was feared for August— with zero production initially expected. We had even reported that Bajaj may halt EV production in August due to this shortage. However, the company has managed to sustain partial output by switching from heavy rare earth magnets to lighter alternatives. As of now, production levels have stabilised at 50–60 percent of plan for electric two-wheelers.
Sales figures for July reflect the slowdown. Bajaj, the second-largest EV maker by volume, saw registrations drop 15 percent month-on-month to 19,650 units.
Industry-wide impact, long-term solutions underway
Bajaj isn’t the only manufacturer dealing with this issue. TVS, Ola Electric, and Ather Energy have also flagged potential disruptions due to the magnet shortage. Ather has warned of dealer-level delivery delays of up to a week during Q2.
To reduce dependency on the constrained supply chain, Bajaj is working on two parallel solutions— increasing the use of light rare earth magnets, and developing next-generation motor technologies that eliminate rare earths altogether. These steps, Sharma says, are crucial for long-term EV scale-up.
Despite the immediate hurdles, demand for the Chetak remains strong. The recently introduced 35 Series platform— which debuted in December 2024 — continues to draw interest.
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