India’s electric two-wheeler industry, a rapidly growing segment of the automotive market, is facing strong headwinds as the shortage of rare-earth magnets (REMs) continues to disrupt production. Even industry leader TVS Motor Company admits the challenges are far from over, despite launching new products to maintain momentum.
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At a virtual press conference held on Thursday, Gaurav Gupta, President of India 2W Business at TVS Motor, candidly acknowledged the crisis. “The rare-earth supply issue has affected the entire industry. Almost every player has been impacted. At present, there is no single clear path forward,” Gupta said. His remarks came during the unveiling of the company’s latest electric scooter, the TVS Orbiter.
TVS Motor Market Strain Amid Rare-Earth Shortage
Rare-earth magnets are critical components in electric motors, especially for electric two-wheelers (E2Ws). The global supply chain, already fragile, has been further shaken by China’s export restrictions earlier this year. Since China controls the majority of the world’s rare-earth supply, Indian manufacturers remain heavily dependent on imports.
Gupta explained that the company is operating in crisis mode, navigating supply uncertainties on a “day-to-day, week-to-week” basis. “We are trying to work with speed and agility on alternative solutions. However, this remains a work in progress. We are also following guidance available in the market and from the government,” he added.
Earlier in June, Sudarshan Venu, Chairman of TVS Motor, had already cautioned that the situation could trigger major disruptions. He warned that prolonged restrictions on REM exports could potentially bring India’s electric two-wheeler production “to a grinding halt.”
How Competitors Are Coping
The shortage has already reshaped India’s EV sales dynamics. Bajaj Auto, which was among the first to flag the REM crisis, has slipped to fifth position in monthly E2W sales. The company managed to deliver only 9,385 units so far, securing an 11% market share — a sharp drop compared to rivals.
Meanwhile, despite the supply crunch, TVS Motor has managed to retain leadership for the fifth consecutive month since April. In August alone, TVS sold 20,461 electric scooters, capturing 24% of the market. Ather Energy followed with 14,723 units, while Ola Electric recorded 14,488 units.
This resilience has been partly credited to the company’s strategy of balancing existing product demand while introducing new electric models like the Orbiter.
TVS Orbiter: A New Bet in a Tough Market
Despite ongoing supply issues, TVS Motor is determined to expand its EV portfolio. The newly launched TVS Orbiter is designed as an entry-level electric scooter, priced at ₹99,900 (ex-showroom, inclusive of the PM e-Drive scheme in Bengaluru and New Delhi). Positioned below the company’s best-selling iQube range, the Orbiter is expected to attract a wider base of customers.
The Orbiter’s key highlights include:
- 3.1 kWh battery pack with an IDC-certified range of 158 km.
- Industry-first 14-inch front wheel for improved stability.
- 845 mm long flat seat for comfort and better ergonomics.
- 290 mm straight-line footboard, making it more practical for daily commutes.
- Two dual-tone colour schemes and six striking palettes, including Neon Sunburst, Stratos Blue, Lunar Grey, and Stellar Silver.
Gupta also hinted that the Orbiter was developed with both domestic and export markets in mind, although he refrained from disclosing specific targets for international expansion.
China’s Role in the Crisis
China has long dominated the rare-earth market, and its policies directly impact global EV production. Earlier this month, Beijing announced plans to ease restrictions on REM exports, citing improving diplomatic ties with India. However, industry insiders remain skeptical, noting that ground-level supply conditions are yet to show any real improvement.
Experts argue that until India strengthens its domestic rare-earth mining and refining ecosystem, dependence on imports will continue to make the sector vulnerable. Several government initiatives have been announced to promote local sourcing and alternative technologies, but these remain in early stages.
Stock Market Impact
While the industry struggles with uncertainty, investor sentiment around TVS Motor remains largely stable. On Thursday, shares of TVS Motor closed flat on the NSE at ₹3,259.90, reflecting cautious optimism. Analysts suggest that while the company’s long-term growth outlook in EVs is strong, short-term risks tied to rare-earth supply chains could weigh on performance.
Outlook for the Industry
Industry experts believe the rare-earth crisis is likely to persist in the short to medium term. Unless supply chains normalize or alternative solutions emerge, India’s electric two-wheeler makers may continue facing production delays and rising costs.
Still, companies like TVS Motor are betting on innovation, product expansion, and government support to weather the storm. The launch of the Orbiter underlines this resilience, signaling that the company is determined to defend its leadership even amid challenges.
As Gupta put it, “We are not out of the woods yet, but we are moving forward with agility.”
Disclaimer: This article is based on publicly available information, official company statements, and industry reports. It is intended for informational purposes only and does not constitute investment or financial advice.
