A First in Indian EV History: “Zero Month” on the Horizon
In a striking revelation that has rattled the Indian electric vehicle (EV) industry, Bajaj Auto’s Managing Director, Rajiv Bajaj, has warned that the company is staring at a complete halt in EV production in August 2025. This could be the first time in Indian automotive history that an EV maker — particularly one as established as Bajaj — may be forced to pause manufacturing entirely for a whole month.
The root cause isn’t local — it’s global. A rare earth magnet shortage, triggered by China’s tightened export policies, has disrupted the supply of essential materials used in EV motors. And Bajaj Auto, known for its popular Chetak electric scooter and GoGo electric three-wheeler, is caught in the crossfire.
Why Rare Earth Magnets Matter More Than Ever
Rare earth magnets — especially neodymium and dysprosium-based magnets — are small but mighty. They power the electric motors that drive EVs, wind turbines, smartphones, and even fighter jets. Without them, the wheels of the green transition simply don’t turn.
While India is working to establish its own magnet manufacturing ecosystem, it’s still heavily dependent on imports — and over 90% of global rare earth magnet exports come from China. When China decided to restrict exports earlier this year, citing environmental and strategic concerns, it triggered a ripple effect across the globe.
For Bajaj Auto, which was ramping up EV production ahead of the festive season, this couldn’t have come at a worse time.
From Full Production to Shutdown: A Month-by-Month Breakdown
- June 2025: Production continued smoothly, thanks to remaining inventory.
- July 2025: Output was slashed by more than half as magnet stock dried up.
- August 2025: Forecasted as a “zero production” month, due to complete depletion of magnet supply.
This progression highlights how fragile the EV supply chain remains, even for an established OEM like Bajaj Auto.
What Rajiv Bajaj Has to Say
In a candid media interaction, Rajiv Bajaj did not mince words.
“We have been hit quite hard… unless we receive shipments by early August, there’s a real possibility we may produce zero EVs next month.”
He also emphasized that while supply chains are global, policy support and clarity need to be local — and immediate.
Bajaj Auto has raised concerns over the lack of timely reimbursements under state-level EV policies and the ambiguous implementation of the Production Linked Incentive (PLI) scheme. According to Rajiv, these policy gaps are compounding an already difficult supply situation.
Festive Season Disruptions Ahead?
The months of September to November are crucial for automakers in India. The festive season — starting with Ganesh Chaturthi and peaking with Diwali — often accounts for 30–40% of annual two-wheeler sales.
A production freeze in August can severely affect dealer stock availability, consumer deliveries, and brand trust, especially if buyers walk into showrooms during festival sales only to find “out of stock” tags on electric models.
EV adoption in India has already been under pressure due to subsidy changes, and this new supply constraint could push fence-sitting buyers further toward ICE (internal combustion engine) alternatives — a blow to the nation’s EV goals.
It’s Not Just Bajaj — Industry-Wide Jitters
Bajaj Auto is not alone in facing the heat. Several EV startups and OEMs across India are struggling to secure rare earth components. According to industry reports:
- Ather Energy has also slashed July output due to magnet shortages.
- TVS Motor is cautiously watching its August pipeline.
- Ola Electric, while currently stable, is relying on stockpiles that won’t last forever.
This raises a serious concern — what happens if the crisis extends beyond August?
India’s EV Vision vs. Global Geopolitics
India’s ambitious plans to electrify transportation hinge on stable access to critical materials. But this rare earth crisis has exposed a key vulnerability: our over-reliance on China for magnet technology.
While India does possess rare earth mineral reserves, processing and refining capabilities are still minimal. It’s a gap that takes years to close — not months.
The government has acknowledged this challenge and is working on:
- Fast-tracking rare earth mining licenses in Andhra Pradesh and Odisha.
- Partnering with Japan, Australia, and the EU for non-China magnet supplies.
- Offering incentives for domestic magnet manufacturing under a revised PLI scheme.
But the impact of these efforts won’t be immediate — and August’s crisis may just be the beginning.
Expert View: What Needs to Happen Now
Industry experts are urging a three-pronged approach to avoid future “zero months”:
- Build Strategic Reserves: Just as oil stockpiles exist, EV-critical materials must also have emergency reserves.
- Diversify Imports: India must reduce its single-country dependence by sourcing magnets from allied nations.
- Incentivize Local Value Chains: Encourage domestic R&D, magnet tech startups, and joint ventures with global suppliers.
Above all, faster government response times, clear incentive guidelines, and transparency in disbursals are urgently needed to boost OEM confidence.
Long-Term Lessons for the EV Industry
While this magnet shortage is a temporary crisis, it offers long-term lessons. The electric future cannot rest on a fragile, single-point supply chain. If India is to lead in clean mobility, we must ensure that local capabilities are built at scale — not just for vehicles, but for every part that goes into them.
EV makers now need to plan for supply chain resilience, not just production speed. And policymakers must understand that building local strength is not optional — it’s survival.
What Should Consumers Do?
If you’re planning to buy an EV this festive season, here’s what you should know:
- Expect limited availability of Chetak and GoGo models in September–October.
- Prices may fluctuate slightly based on supply and subsidy clarity.
- Consider pre-booking early if you’re set on a specific model.
This is also a good time to research EV brands with diversified supply chains — companies with local manufacturing or international sourcing agility may be less affected.
Final Thoughts: A Wake-Up Call, Not the End
Bajaj Auto’s potential “zero month” is not just a company crisis — it’s a wake-up call for the entire Indian EV ecosystem. From boardrooms to government offices, this rare earth disruption must spark urgent action and long-term thinking.
India’s EV dream is still alive — but it can’t run on borrowed magnets forever.
Suraj Gaur Is An Ev Industry Analyst And Content Creator, Dedicated To Sharing Trusted Insights On Electric Vehicles, Charging Stations, And India’s Clean Mobility Future.
