Electric two-wheeler manufacturers are preparing for a challenging April after record-breaking March sales, as a global aluminium shortage threatens to raise production costs, compress margins, and force price increases that could dampen consumer demand.
Aluminium prices are hovering around four-year highs of $3,500–$3,600 per tonne on the London Metal Exchange, driven by supply shocks linked to geopolitical tensions in the Gulf and disruptions at key smelters such as Emirates Global Aluminium, and Aluminium Bahrain (Alba).
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“Auto and auto component makers are evaluating production optimisation, greater use of recycled aluminium and alternative materials to manage the situation,” said Poonam Upadhyay, Director at Crisil Ratings. The immediate impact, she added, is on sourcing and costs, with production risks emerging if constraints persist.
Bahrain’s Alba, one of the world’s largest aluminum smelters, has already declared force majeure on deliveries and cut output by 19%, citing its inability to ship through the Strait of Hormuz. In India, aluminium prices have risen by about ₹35–45 per kg since end-February when the war started to around ₹358.7 per kg, significantly raising input costs.
Aluminium remains central to EV design due to its role in light weighting and heat management, with applications across battery packs, traction motors, inverters and key body components.
Chaitanya Jalan, Executive Director at Ramakrishna Forgings, said aluminium is critical to EV design, aiding lightweighting and improving battery efficiency and overall performance. While acknowledging the sharp rise in prices over the past month, he said the company has not seen a direct impact as it typically passes on cost increases to OEM customers. “If the conflict continues, availability of the raw material will have to be watched,” he said.
Cost pressure due to shortage
The cost pressure due to aluminium shortage comes a month after the electric two-wheeler industry logged its best-ever monthly sales of 1.91 lakh units in March, driven by year-end dispatches and pre-buying ahead of expected price hikes.
Several automakers have flagged rising input costs due to higher prices of precious metals such as silver and platinum, along with broader commodity inflation in steel and aluminium during the third quarter. TVS Motor Director & CEO K N Radhakrishnan said commodity pressures are being driven by aluminium, copper, zinc and precious metals such as platinum, palladium and rhodium. The company is relying on scale, cost controls, product mix and selective price hikes to offset the impact.
Bajaj Auto CFO Dinesh Thapar also said noble metals such as rhodium, platinum and palladium are firming up, while aluminium and copper remain on an upward trend and steel is largely stable. Ather Energy co-founder and CEO Tarun Mehta noted that while battery costs are relatively manageable, “the vehicle side is turning volatile.”
Bajaj Auto and Ather Energy have reportedly taken fresh price hikes across select electric two-wheeler models, while TVS Motor has also indicated the possibility of increases. “You can look at small price increases, but they can’t be fully passed on,” Radhakrishnan said during Q3FY26 earnings call. TVS Motor and Ather Energy did not respond to emails seeking comment on the impact of rising aluminium prices and supply constraints.
Upadhyay noted that aluminium prices rose about 10% month-on-month in March and are 10–12% higher on average in FY26 compared with FY25. “For E2W makers, the impact is likely to be managed through calibrated price hikes, as full pass-through is constrained in a price-sensitive market, along with tighter cost controls to protect margins,” she said.