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Hindustan Times
3 days ago
- Automotive
- Hindustan Times
India's Bajaj Auto flags lower-than-planned EV output on rare earth magnet crunch
Bajaj Auto will not meet its electric vehicle delivery target in the second quarter as the homegrown two-wheeler giant is grappling with a shortage of rare earth magnets. The company estimates that it will be able to deliver about 50-60 per cent of its electric two-wheeler plans in this quarter. This comes as the entire auto industry is facing a crunch of rare earth magnets. Bajaj Auto's CFO Dinesh Thapar said in a post-earnings call that the OEM is working on a host of alternatives to soften the production blow, including using motors made with more abundant light rare earths, rather than heavy rare earths. "At this point in time, it looks like we might be able to deliver about 50-60 per cent of our electric two-wheeler plan for this quarter and about 70-80 per cent of the electric three-wheeler plan," he said. Thapar also added that Bajaj should be in a position to de-risk itself from China's rare earth magnet export ban by March this year. China, which controls more than 90 per cent of the global production of rare earth magnets, banned the export of this critical material in April this year. This move forced the automakers, including Bajaj Auto's peer TVS Motor Company, to search for alternatives amid a scramble for supplies. The EV output slump at India's second-largest electric scooter manufacturer comes at a time when most automakers boost production during a lucrative festive period that begins late August. Speaking on this, Thapar said that even if Bajaj unlocks a lot of supply after this, there's certainly likely to be an impact in terms of the festive loading that the company would have liked. Meanwhile, Bajaj Auto beat quarterly profit estimates on Wednesday, helped by a boost in exports as it resumed overseas shipments of its premium KTM motorcycles. The automaker also attributed the higher profit to improving margins at its e-scooter business Chetak and electric three-wheeler Gogo. Bajaj Auto reported a profit of 20.96 billion rupees ($239 million) for the April-June period, while analysts had expected 20.42 billion rupees, according to data compiled by LSEG. Check out Upcoming EV Bikes in India. First Published Date:
Time of India
4 days ago
- Automotive
- Time of India
Bajaj Auto faces double whammy with tepid motorcycle demand and low EV production
New Delhi: With a consistent decline in despatches of its motorcycles in the domestic market, Bajaj Auto said it is relying on new product introductions to drive demand in the coming months. The company's CFO, Dinesh Thapar, said two key factors, pending product upgrades and regional softness, are primarily responsible for the muted growth. 'We are at a stage where until our new products are introduced into the portfolio we may face some headwinds, but these will be addressed. We are cognisant of it, and it is only a matter of time,' Thapar told ETAuto during a media briefing. He added that the company has consistently maintained its strategic focus on motorcycles in the 125cc and above category. 'We are not participating at the entry level substantially, and that segment's growth is therefore acting as a bit of a drag.' Thapar acknowledged that some existing models may not be as aligned with current customer preferences as the newer offerings from competitors. He said the marriage season in April and May saw strong demand, especially in the North, where the company performed well. However, its significant exposure to the southern market has also weighed on overall numbers. 'We are overindexed in the South. And clearly, that part of the market has gotten softer compared to the rest of the country.' Impact on festive season The Pune-based manufacturer of two- and three-wheelers is actively working to identify alternative sources and solutions for rare earth magnets. However, as things stand, the shortfall will affect this year's festive season availability, particularly September, which was expected to be a key fill-in period. 'Ideally, we had targeted September to build up inventory ahead of the Dussehra and Diwali festive season with a strong ramp-up planned for Chetak given the growing momentum around the brand. However, based on current visibility, we now anticipate achieving only about 50–60 per cent of that original plan,' Thapar said. Constrained by supplies, the automaker could deliver only around 60 per cent of its electric two-wheeler volumes and about 75 per cent of electric three-wheeler volumes during June. However, he was confident that the company 'should be in a position to de-risk all of this, possibly by the end of the financial year'. Among the alternatives, Bajaj is exploring ways to redesign motors using low rare earth (LRE) materials. 'So, in the short term, the focus is on securing alternative grades and sources of rare earth magnets. The long-term strategy is to transition to non-rare-earth magnet motors, such as those using ferrite technology, by the end of this fiscal,' he said. Bajaj Auto was an early voice of concern on the rare earth magnet shortage, cautioning about possible production disruptions in August.
Reuters
4 days ago
- Automotive
- Reuters
India's Bajaj Auto flags lower-than-planned EV output on rare earths crunch
Aug 6 (Reuters) - Bajaj Auto ( opens new tab will not meet its electric vehicles delivery target in the second-quarter as the Indian automaker grapples with a shortage of rare earth magnets, a senior executive said on Wednesday. "At this point in time, it looks like we might be able to deliver about 50%-60% of our (electric) two-wheeler plan for this quarter and about 70%-80% of the (electric) three-wheeler plan," Bajaj Auto's chief financial officer Dinesh Thapar told reporters in a post-earnings call. The automaker is working on a host of alternatives to soften the production blow, including using motors made with more abundant light rare earths, rather than heavy rare earths, he said. China, which controls 90% of the global production of rare earths, banned its export in April, forcing automakers, including Bajaj Auto's peer TVS Motor, to search for alternatives amid a scramble for supplies. Bajaj "should be in a position" to de-risk itself from China's ban by March 2026, Thapar said. The output slump at India's second-largest electric scooter manufacturer comes at a time when most automakers boost production during a lucrative festive period that begins late August. "Even if we unlock a lot of supply after this, there's certainly likely to be an impact in terms of the festive loading that we would have liked," Thapar said. Earlier in the day, Bajaj Auto beat quarterly profit estimates on Wednesday, helped by an boost in exports as it resumed overseas shipments of its premium KTM motorcycles. It also attributed the higher profit to improving margins at its e-scooter business Chetak and electric three-wheeler Gogo. The company reported a profit of 20.96 billion rupees ($239 million) for the April-June period, while analysts had expected 20.42 billion rupees, according to data compiled by LSEG. Bajaj Auto shares closed 0.6% lower on the day. ($1 = 87.6770 Indian rupees)
