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Hindustan Times
4 hours ago
- Automotive
- Hindustan Times
Indian EV industry to face major disruption by July over China's rare earth magnet delays, warns Bajaj Auto
The Indian EV industry is looking at a major disruption, which could arise from the rare earth magnet supply chain crisis. Check Offers India's electric vehicle production will take a hit as early as July this year if China doesn't resume shipments of rare earth magnets, said Bajaj Auto. The homegrown two-wheeler manufacturer that currently makes the electric scooter Chetak, has warned that any further delays in securing the key component for EVs will severely hit the output of the Indian electric vehicle industry. Reuters has quoted a top Bajaj Auto official saying that any further delays in securing the supply of rare earth magnets from China could seriously impact electric vehicle production by July 2025. Bajaj Auto's Executive Director Rakesh Sharma told analysts during an earnings call that the company is hoping that in the coming weeks, approvals to ship will be secured by exporters from China, based on the declarations by Bajaj Auto's vendors. "We are hoping that in the coming weeks, approvals to ship are secured by exporters from China based on the declarations by our vendors," he reportedly said. Sharma's comment comes at a time when the Indian auto industry groups have sought the intervention of the Indian government to help access rare earth magnets held at Chinese ports since April 4. China currently controls more than 90 per cent of global processing capacity for the rare earth magnets that are used for automobiles, clean energy and home appliances. The country enacted restrictions in April requiring companies to obtain import permits from Beijing. Sharma's comments marked the first public admission of the implication of China's export restrictions on rare earth magnets, which could grind Indian auto production, especially electric vehicle production, to a halt. The rare earth magnets are used in electric motors that run electric vehicles. These rare earth magnets are also used in key components of vehicles such as power windows and audio speakers, which are used in traditional cars. Sharma termed the current situation as a dark cloud on the horizon and said that while a process for end-use declaration for non-military users has been defined in India, it is yet to be completed in China. Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape. First Published Date: 01 Jun 2025, 11:14 AM IST
Time of India
a day ago
- Automotive
- Time of India
Magnet crisis: Auto giants rush to China for rare earth rescue
The Indian automotive industry is preparing to send a high-level delegation to China next week to address escalating concerns over delays in rare earth magnet imports, people familiar with the development said. They noted that China's new export restrictions on rare earth materials, effective April 4, have created procedural bottlenecks, resulting in delayed shipments to Indian manufacturers. Several consignments of India-bound rare earth magnets - critical for electric motors and various automotive components - are reportedly stuck at Chinese ports, raising fears of production disruptions as early as the first week of June. A joint delegation from the Society of Indian Automobile Manufacturers (Siam) and the Automotive Component Manufacturers Association (ACMA) will meet with senior Chinese government officials to expedite necessary clearances and restore the flow of shipments, people cited above said. India's commerce and external affairs ministries are currently coordinating with their counterparts in Beijing through the Indian embassy to facilitate the meetings. "The situation is serious, but we are receiving strong support from the government. We are hopeful of an early resolution," said Vinnie Mehta, director general of ACMA. China accounts for an estimated 70-80per cent of global rare earth processing and over 90per cent of rare earth magnet production, making automakers heavily dependent on imports from the country. Automakers and component suppliers warn that further delay in getting the magnets could severely impact vehicle production, especially in the electric mobility segment. "The rare earth situation is a very difficult one," Rakesh Sharma, executive director at Bajaj Auto , said during the company's recent earnings call. He flagged the "onerous" approval process that currently involves multiple certifications from Indian ministries, the Chinese embassy, and Chinese provincial authorities. While the supply crunch poses a serious challenge, some players have begun diversifying their sourcing strategy. JBM Group, a leading electric bus manufacturer, has started procuring rare earth magnets from other Asian countries. "Post-pandemic, we undertook a comprehensive risk assessment that led us to explore alternative supply bases beyond China," said Nishant Arya, vice-chairman of JBM Group. With inventory levels depleting rapidly, Siam and ACMA have been in active dialogue with the commerce ministry. As reported by Reuters on May 29, Siam informed government officials that component makers' inventories could run out by the end of May and urged intervention at the highest level, including from the Prime Minister's Office. Representatives from major OEMs and suppliers, particularly those involved in motor manufacturing, are expected to be part of the industry delegation headed for China.
Time of India
2 days ago
- Automotive
- Time of India
Magnet crisis: Auto giants rush to China for rare earth rescue
The Indian automotive industry is preparing to send a high-level delegation to China next week to address escalating concerns over delays in rare earth magnet imports, people familiar with the development said. They noted that China's new export restrictions on rare earth materials, effective April 4, have created procedural bottlenecks, resulting in delayed shipments to Indian manufacturers. Several consignments of India-bound rare earth magnets - critical for electric motors and various automotive components - are reportedly stuck at Chinese ports, raising fears of production disruptions as early as the first week of June. A joint delegation from the Society of Indian Automobile Manufacturers (Siam) and the Automotive Component Manufacturers Association (ACMA) will meet with senior Chinese government officials to expedite necessary clearances and restore the flow of shipments, people cited above said. India's commerce and external affairs ministries are currently coordinating with their counterparts in Beijing through the Indian embassy to facilitate the meetings. "The situation is serious, but we are receiving strong support from the government. We are hopeful of an early resolution," said Vinnie Mehta, director general of ACMA. China accounts for an estimated 70-80% of global rare earth processing and over 90% of rare earth magnet production, making automakers heavily dependent on imports from the country. Automakers and component suppliers warn that further delay in getting the magnets could severely impact vehicle production, especially in the electric mobility segment. "The rare earth situation is a very difficult one," Rakesh Sharma, executive director at Bajaj Auto , said during the company's recent earnings call. He flagged the "onerous" approval process that currently involves multiple certifications from Indian ministries, the Chinese embassy, and Chinese provincial authorities. While the supply crunch poses a serious challenge, some players have begun diversifying their sourcing strategy. JBM Group, a leading electric bus manufacturer, has started procuring rare earth magnets from other Asian countries. "Post-pandemic, we undertook a comprehensive risk assessment that led us to explore alternative supply bases beyond China," said Nishant Arya, vice-chairman of JBM Group. With inventory levels depleting rapidly, Siam and ACMA have been in active dialogue with the commerce ministry. As reported by Reuters on May 29, Siam informed government officials that component makers' inventories could run out by the end of May and urged intervention at the highest level, including from the Prime Minister's Office. Representatives from major OEMs and suppliers, particularly those involved in motor manufacturing, are expected to be part of the industry delegation headed for China.
Time of India
2 days ago
- Automotive
- Time of India
Rare earth magnet bottleneck threatens Bajaj Auto's EV output; Q4 profit rises 6% amid strong domestic demand
Bajaj Auto warned of a looming disruption in electric scooter production starting July if the ongoing restrictions on exports of rare earth magnets by China are not resolved swiftly. The company flagged a significant operational risk during its March quarter earnings call, with inventories of the critical component depleting and no clear timeline for resolution in sight. 'The rare earth situation is a very difficult one,' Rakesh Sharma, executive director, Bajaj Auto told reporters citing a 'very onerous' approval process that includes certifications from Indian ministries, the Chinese embassy, and local Chinese provincial authorities. Although more than 30 applications have been submitted by the industry, no clearances have been received so far. Chinese authorities have indicated that the process could take 40–45 days, but Sharma said that the 'loop has not closed,' casting doubt on the viability of the system. 'If there is no relief and no shipments come through, production will definitely be impaired by July,' Sharma warned. The company emphasised that there is no short-term substitute, as refining rare earth elements—despite deposits in India and elsewhere—requires substantial investment and technological expertise. Rare earth magnets are a key input in electric motors, and their limited supply could stall Bajaj Auto's electric vehicle ambitions just as it is scaling up its EV pipeline. China is the market leader with 80% of supplies concentrated in the region. The company acknowledged that this issue, coupled with geopolitical and currency-related headwinds, could constrain export and EV growth in the near term. Driven by sustained demand in the domestic market and a recovery in select export geographies, net profit at Bajaj Auto for the quarter ended March 31 rose 6% year-on-year to Rs 2,049 crore from Rs 1,936 crore in Q4FY24. Revenue from operations stood at Rs 12,148 crore, up 6% from Rs 11,485 crore in the year-ago period. The uptick was supported by a favourable product mix, robust domestic demand, and margin stability despite cost pressures. The March quarter revenue and net profit were above analysts' average expectation of Rs 11,821 crore and Rs 1,946 crore in that order. Total sales during the quarter grew 4% to over 11 lakh units, with motorcycles and three-wheelers continuing to show strong performance. EBITDA margins were steady, aided by premiumisation, particularly in the Pulsar and KTM ranges. For FY25, Bajaj Auto reported a standalone net profit of Rs 8,151 crore, marking a 9% rise over Rs 7,479 crore in the previous year. Adjusted for a one-time deferred tax provision of ₹211 crore, the profit stood at Rs 8,363 crore. Full-year revenue grew 12% to Rs 50,010 crore, as volumes crossed 46.5 lakh units. Export markets, especially in Latin America and parts of Asia, showed encouraging signs. The company's exports in 30 key countries grew by 31%, outpacing the industry's 26% growth, with record sales in models like Pulsar and Dominar. However, the outlook for Africa remains cautious due to economic fragility, said Sharma. Bajaj Auto ended the year with a cash flow from operations of Rs 7,267 crore and declared a dividend of Rs 210 per share. A Rs 4,932 crore share buyback was also completed earlier in the year. Bajaj Auto's shares closed at Rs 8873.30 a piece, up 0.28% on the BSE.
Economic Times
2 days ago
- Automotive
- Economic Times
Rare earth magnet bottleneck threatens Bajaj Auto's EV output; Q4 profit rises 6% amid strong domestic demand
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: Bajaj Auto warned of a looming disruption in electric scooter production starting July if the ongoing restrictions on exports of rare earth magnets by China are not resolved swiftly. The company flagged a significant operational risk during its March quarter earnings call, with inventories of the critical component depleting and no clear timeline for resolution in sight.'The rare earth situation is a very difficult one,' Rakesh Sharma, executive director, Bajaj Auto told reporters citing a 'very onerous' approval process that includes certifications from Indian ministries, the Chinese embassy, and local Chinese provincial more than 30 applications have been submitted by the industry, no clearances have been received so far. Chinese authorities have indicated that the process could take 40–45 days, but Sharma said that the 'loop has not closed,' casting doubt on the viability of the system.'If there is no relief and no shipments come through, production will definitely be impaired by July,' Sharma warned. The company emphasised that there is no short-term substitute, as refining rare earth elements—despite deposits in India and elsewhere—requires substantial investment and technological earth magnets are a key input in electric motors, and their limited supply could stall Bajaj Auto's electric vehicle ambitions just as it is scaling up its EV pipeline. China is the market leader with 80% of supplies concentrated in the region. The company acknowledged that this issue, coupled with geopolitical and currency-related headwinds, could constrain export and EV growth in the near by sustained demand in the domestic market and a recovery in select export geographies, net profit at Bajaj Auto for the quarter ended March 31 rose 6% year-on-year to ₹2,049 crore from ₹1,936 crore in Q4FY24. Revenue from operations stood at ₹12,148 crore, up 6% from ₹11,485 crore in the year-ago period. The uptick was supported by a favourable product mix, robust domestic demand, and margin stability despite cost pressures. The March quarter revenue and net profit were above analysts' average expectation of Rs 11,821 crore and Rs1,946 crore in that sales during the quarter grew 4% to over 11 lakh units, with motorcycles and three-wheelers continuing to show strong performance. EBITDA margins were steady, aided by premiumisation, particularly in the Pulsar and KTM FY25, Bajaj Auto reported a standalone net profit of ₹8,151 crore, marking a 9% rise over ₹7,479 crore in the previous year. Adjusted for a one-time deferred tax provision of ₹211 crore, the profit stood at ₹8,363 crore. Full-year revenue grew 12% to ₹50,010 crore, as volumes crossed 46.5 lakh markets, especially in Latin America and parts of Asia, showed encouraging signs. The company's exports in 30 key countries grew by 31%, outpacing the industry's 26% growth, with record sales in models like Pulsar and Dominar. However, the outlook for Africa remains cautious due to economic fragility, said Auto ended the year with a cash flow from operations of ₹7,267 crore and declared a dividend of ₹210 per share. A ₹4,932 crore share buyback was also completed earlier in the year. Bajaj Auto's shares closed at Rs8873.30 a piece, up 0.28% on the BSE.
