Bajaj Auto managing director, Rajiv Bajaj on Friday said that with the supply of rare earth magnets improving, the supply of electric vehicles will get a boost ahead of the festive season.
Ambitious production targets for the festive season
The company is expected to manufacture 15,000 plus units of the electric Chetak in September, slightly more than half the normal levels, and ramp this up to 40,000 in September. It estimates the production of electric three-wheelers at around 3,000 units. Automobile manufacturers sell anywhere between 30-35% of their annual sales during the festive season.
Speaking to CNBV TV18, Bajaj said the situation on rare earth magnets has changed for the better. Last month, Bajaj had indicated that August might turn out be a “zero” production month for its electric two- and three-wheelers.
The GST debate and Industry recovery
The Bajaj CEO said the company had started receiving clearances for light rare earth magnets about 3-4 weeks back though it was somewhat slow in the beginning with delays and documentation. However, the slow process is now accelerating, he said. On the heavy rare earth front, however, the company is yet to see any movement. “Maybe it is work-in-progress,” Bajaj said. Nevertheless, the company believes it has a sufficient supply of magnets to ensure supply for the festive season.
China’s ban on exports of rare earth magnets had hit makers of electric vehicles but there are indications China will resume exports of this critical item.
On the proposed cuts in the GST rates, the Bajaj chief noted that a reduction to 18% was “fabulous” especially since the 2-wheeler industry has not yet recovered to its pre-Covid levels due to factors such as high inflation. At the same time, the rate is higher than in major markets such as Brazil, Indonesia, Thailand or Malaysia. “It is still high compared to a median of 12% by 50%,” said. Also, differing GST rates for various sizes of two-wheelers, he said, causes distortions.