Bajaj Auto, which had earlier announced its plans to launch a new entry-level Chetak electric scooter in June, is recalibrating the launch of the model amid the shortage of rare earth magnet supply from China.
In May, the automaker said it is planning to launch a new model of Chetak electric scooter that will cater to the entry-level segment as part of the company’s broader strategy to strengthen its position in the rapidly growing electric mobility market.
However, on Wednesday, Bajaj Auto’s Executive Director Rakesh Sharma said the company is focusing on restoring the production of existing models, which has been disrupted by the shortage of heavy rare earth magnet supply from China, before bringing new products.
Baja Auto had to reduce the production of its electric two-wheelers by as much as 50% in July and anticipates a similar production cut for August and September because of the heavy rare earth magnet supply crunch.
“We are completely focused on restoring 100% of the production to the current range which itself is quite new…the supply situation is improving. But we have to still see how it pans out before we start to make some big plans and start to bring in new products,” Sharma said.
Bajaj Auto sells electric two-wheelers under the Chetak brand, which has four variants – 3001, 3503, 3502, and 3501. The Chetak 3001 is the base model with a starting ex-showroom price of Rs 99,900, while the top-end Chetak 3501 costs Rs 1,22,500.
The Chetak 35 Series platform was launched in December 2024 and plays a significant role is supporting Bajaj Auto’s dominant position in the electric wheeler market. “It is not even six months in the market. There is a big demand, highly underserved,” Sharma noted.
Bajaj Auto is currently the second-largest player in the electric three-wheeler market after TVS Motor. The automaker produced 63,600 units of Chetak in the first quarter of this financial year.
The shortage of magnets initially threatened to bring Bajaj Auto’s electric scooter production to a complete standstill in August. However, the automaker used light rare earth magnets instead of heavy rare earth magnets and managed to achieve 50-60% of its planned output for July and so far in August.
Meanwhile, the company, which is the largest three-wheeler maker in the country, will make its debut in the electric rickshaw with the launch of its first model on August 10. Electric rickshaw is the largest sub-segment in the three-wheeler segment, accounting for half of the market.
“We are going to launch in August and it is going to open up a new segment for us, which sells around 45,000 units per month. 90% of those come with a lead-acid battery and are very poor-quality vehicles. We will start our work of upgrading those customers because there is a lot of dissatisfaction, both amongst the drivers and the passengers,” Sharma added.
Shortfall in the planned production of electric three-wheelers during August and September is estimated in the range of 25-30%.