By Nandan Mandayam
(Reuters) -Bajaj Auto will not meet its electric vehicles delivery target in the second-quarter as the Indian automaker grapples with a shortage of rare earth magnets, a senior executive said on Wednesday.
“At this point in time, it looks like we might be able to deliver about 50%-60% of our (electric) two-wheeler plan for this quarter and about 70%-80% of the (electric) three-wheeler plan,” Bajaj Auto’s chief financial officer Dinesh Thapar told reporters in a post-earnings call.
The automaker is working on a host of alternatives to soften the production blow, including using motors made with more abundant light rare earths, rather than heavy rare earths, he said.
China, which controls 90% of the global production of rare earths, banned its export in April, forcing automakers, including Bajaj Auto’s peer TVS Motor, to search for alternatives amid a scramble for supplies.
Bajaj “should be in a position” to de-risk itself from China’s ban by March 2026, Thapar said.
The output slump at India’s second-largest electric scooter manufacturer comes at a time when most automakers boost production during a lucrative festive period that begins late August.
“Even if we unlock a lot of supply after this, there’s certainly likely to be an impact in terms of the festive loading that we would have liked,” Thapar said.
Earlier in the day, Bajaj Auto beat quarterly profit estimates on Wednesday, helped by an boost in exports as it resumed overseas shipments of its premium KTM motorcycles.
It also attributed the higher profit to improving margins at its e-scooter business Chetak and electric three-wheeler Gogo.
The company reported a profit of 20.96 billion rupees ($239 million) for the April-June period, while analysts had expected 20.42 billion rupees, according to data compiled by LSEG.
Bajaj Auto shares closed 0.6% lower on the day.
($1 = 87.6770 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru; Editing by Harikrishnan Nair and Mrigank Dhaniwala)
