The export restriction of rare earth materials from China is taking a toll, and Bajaj may halt production of its EV, the Chetak, in August, as per an interview with the Economic Times. Rajiv Bajaj says that the Chetak EV and the recently-launched GoGo electric three-wheeler may see a ‘no-sales’ month in August owing to a severe shortage of rare earth materials.
Rare earth shortage efffect
Rajiv Bajaj was one of the first to voice his concern over the shortage of rare earth elements and how this could bring the Indian EV industry to a halt. The effect is already showing its dark side, and Bajaj becomes the first manufacturer to halt EV production.
As per the report, Bajaj’s EV production was in full swing in June 2025 with an existing stock of rare earth elements, and in July, the production had halved. Bajaj has urged the government to provide better clarity to all stakeholders on the supply chain situation and the near-term outlook.
Rare earth exports from China
China had eased its export restrictions a few months ago to select countries, and India was not on the priority list, despite being the fastest-growing country in terms of automotive sales globally. With the world switching towards cleaner mobility, EVs have seen popularity; however, China remains the world leader in rare earth elements.
Rare earth elements are not only used in electric vehicles to make magnets and other components, but are also used in ICEs as well, along with other sectors such as renewable energy infrastructure, consumer electronics, defence systems, and aerospace applications.
With China tightening its exports on rare earth materials, this has become a severe hurdle for India’s goals on electric mobility and cleaner emission norms, as the EV industry is the first to get affected, and others will soon follow.
The government’s next steps, in terms of policies and supply chain resilience, will play a crucial role in deciding the outcome of the electric mobility industry in India. Industry experts have already warned that until domestic manufacturing of magnets is developed, India’s EV transition aims will be severely disrupted.
