Bajaj slips behind Ola, Ather, Hero in August electric two-wheeler sales

Legacy automaker Bajaj Auto , which has consistently been India’s second-largest electric two-wheeler maker this fiscal, slipped behind Bhavish Aggarwal-led Ola Electric Mobility , Ather Energy and Hero MotoCorp in the month of August as the shortage of rare earth magnets hit the company’s EV production.

TVS Motor Company continued to maintain its lead in the electric scooter space. The automaker sold 24,087 e-scooters in August, according to data sourced from the government’s VAHAN registration website.

Ola Electric overtook Bajaj Auto to emerge as the second-largest electric two-wheeler maker, recording sales of 18,972 units in August.

Newly listed Ather Energy took the third spot with sales of 17,856 units, narrowing gap with its rival new-age EV maker Ola.

Hero MotoCorp, too, raced ahead of Bajaj Auto for the first time in EVs, clocking sales of 13,313 e-scooters in August. Bajaj Auto’s electric scooter sales declined 30% year-on-year to 11,730 units last month.

On a year-on-year basis, Ola Electric, too, witnessed a 31% drop in its EV sales in August.

Electric two-wheeler sales of TVS Motor, Ather Energy and Hero MotoCorp saw a year-on-year growth of 37%, 65% and 180%, respectively, in August.

Electric vehicles comprise a little over 6% of total two-wheeler sales in India and about 20% of overall scooter sales.

The EV industry recently faced challenges as China curbed exports of rare earth magnets, forcing companies such as Bajaj Auto, TVS Motor Company and Ather Energy to slash production.

China, the world’s largest producer of rare earth magnets, has stopped shipments of rare earth magnets to India since April. India imports around ₹300 crore of rare earth magnets from China annually.

However, with the thawing of relations between India and China, there is hope that the rare earth magnet crisis may be resolved soon.

On August 22, Bajaj Auto said it had overcome rare earth magnet supply chain constraints and resumed deliveries of its Chetak e-scooter by securing a sufficient supply of rare-earth magnets ahead of the festive season. The statement came weeks after the company forecast the rare earth magnet shortage to hit half of its electric two-wheeler output for the quarter ended September.

To prevent any disruption from rare earth magnets in the future, the two-wheeler industry is now redesigning motors used in EVs with Less Rare-Earth (LRE) permanent magnet grades instead of Heavy Rare-Earth grades.

In July, Ola Electric said it plans to introduce “rare-earth-free” motors in its product portfolio starting next quarter to deal with Chinese export curbs on rare earth magnets. “For the last couple of years, we have been developing rare-earth-free motors,” Ola Electric said, adding that it has already started production of these motors. “These motors ensure no business continuity risk, are parity in performance and save money as rare earth magnets are costly,” the EV maker said.

Over the long term, Bajaj Auto, too, plans to potentially de-risk the magnet issue by designing components that do not involve rare earths. “We should be able to de-risk all of the by the end of the financial year,” Dinesh Thapar, chief financial officer at Bajaj Auto, said in August.