Restrictions imposed by China on rare earth magnets are beginning to affect the electric vehicle market. Bajaj, a leading electric two-wheeler manufacturer, is experiencing the impact of the rare earth shortage. According to new data released by the Society of Indian Automobile Manufacturers (SIAM), Bajaj Auto produced 10,824 Chetak electric scooters last month. This represents a significant decrease of 9,560 units, or 47%, compared to the 20,384 units produced in July 2024. Furthermore, the July production figures are down 41% compared to the 18,479 units produced in June 2025.
These figures suggest that despite strong market demand, the production decline is likely due to the shortage of rare earths. Bajaj Auto was among the first Indian automakers to warn of the potential impact of the rare earth magnet shortage. Rare earth magnets are used in various components of electric vehicles, including motors, power steering systems, generator magnets, dashboard displays, and LED lighting systems. Their use is also crucial in manufacturing many other components within the electric vehicle ecosystem.