Key highlights
- Bajaj Chetak and other EV production likely to be stopped
- Rare earth magnet availability crisis deepens
- No solution in sight to overcome the rare earth magnets crisis
Bajaj Auto Ltd. is soon going to take a major step that will halt the EV run for the brand. The company will soon halt the production of its electric vehicles, including the Chetak e-scooter, in August. Read below why Bajaj is stopping EV production and how it will affect customers.
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Bajaj Chetak, EV production to be halted in August – Why?
As the rare earth mineral crisis deepens internationally, Rajiv Bajaj has hinted at bad times coming ahead for EV production. The brand has hinted that it might be forced to completely halt the production of EVs, including the Chetak e-scooter, in August due to the shortage of rare earth magnets.
The rare earth magnets are imported from China, which holds the majority of the rare earth minerals production. In fact, China has a monopoly over the rare earth minerals exports, which it is currently using to fight against the tariff law war with the US.
With that said, Bajaj and other major manufacturers like TVS are solely dependent on these imported rare earth magnets used to make critical EV parts. However, the limited supply has already led to cuts the production numbers.
Moreover, Bajaj has also said that it does not have any solution for this problem yet. As there are no immediate alternatives, the brand can not just shift to new vendors and redesign the parts, as it will be a costly affair that will increase the ex-showroom costs of the EVs, which the Indian market is very sensitive about.
The Pune-based two-wheeler manufacturer has also urged the government to become more transparent about the future policies for EVs and help manufacturers with the rare earth mineral crisis, as it is leading to the loss and downfall of EVs.
Our say
The rare earth mineral crisis is deepening continuously worldwide. Mass market manufacturers like Bajaj are struggling with EV production. The consistently expanding EV market has hit a wall with this crisis.
