With the rare earth magnet crisis threatening to impact the electric vehicle industry, the launch pipeline of electric two-wheelers this year is likely to be postponed or delayed.

While two-wheeler companies have pointed out that production will be impacted from July onward, industry circles said that launches of new electric two-wheelers are likely to be postponed towards the end of FY26.

“Motors used in electric two-wheelers typically range in cost from ₹8,000 to ₹15,000, depending on their power output and vehicle specifications. Of that, rare earth magnets account for nearly 30 per cent of the total motor unit cost. In FY25, India imported approximately $200 million worth of these magnets for both automotive and non-automotive applications, with around 85 per cent of the total sourced from China. While the trade value may appear modest, the strategic dependence it reflects is anything but. The supply uncertainty has cast a shadow on production planning. The dependence on China for these specialised materials could upend the automobile sector, particularly the fast-growing electric vehicle segment, if the concern remains unresolved,” said Jitin Makkar, Senior Vice President and Group Head – Corporate Ratings, ICRA Ltd.

Expected launches

More than six new electric two-wheelers are expected to be launched in 2025, including Ola Adventure, Suzuki e Access, Ampere Nexus, Liger X and Ultraviolette Tesseract.

With the largest market share in electric two-wheelers, Bajaj Auto has pointed out that the delay in the procurement of rare earth magnets will lead to the postponement of new launches and put the electric vehicle business at risk.

“80 per cent of the products required for manufacturing electric vehicles come from China. 30 applications for procuring rare earth magnets have been made from the auto industry, which are at various stages of approval. However, there has been no relief, and if this continues, then production lines in July will be severely impacted,” Rakesh Sharma, Executive Director of Bajaj Auto, told the media.

“The delay in electric vehicle launches will depend on the policy, whether we allow motors and components rather than magnets to be imported from China for the short term. EV electricals form ~15 to 20 per cent of the bill of materials of the whole vehicle, and magnets are a small part of them,” said Anurag Singh, Advisor, Primus Partners.

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Published on June 13, 2025