Dealing with rare earth magnets supply shortage on daily basis, volumes hit: TVS

The supply constraints of rare earth magnets have hit volumes of electric vehicles, with the issue being on a day-to-day management approach, and the company is not yet out of the woods, senior officials of TVS Motor Company said on Thursday.

The company and other industry players are in discussions with the government to overcome the challenge and also for exemptions on domestic value addition requirements for the PM eDrive and PLI schemes.

"The situation has impacted the industry. Almost every player has been impacted by that. There is no clear one-way forward as of now. It is almost on a day-to-day management approach from a supply constraint situation that we all are facing at the same time," TVS Motor Company President - India 2W Business, Gaurav Gupta, told reporters in a virtual conference call.

He was responding to a query on how the company is handling the shortage of rare earth magnets -- a key component for electric vehicles—after China put restrictions on exports.

Gupta further said, "There is speed and agility to try and work on alternative solutions also, but still, it is a work in progress. We are following the guidance available in the marketplace and also from the government accordingly. We do hope and we're optimistic that the situation gets resolved at the earliest, so that the path forward helps customers get onto their favourite vehicles at the earliest, specifically from a TVS perspective."

However, he said, "We are not out of the woods yet. It is almost a day-to-day management, a week-to-week outlook, exploring alternatives to how to make it possible for our vehicles to get made."

To another query on the impact on sales of EVs, Gupta said there has been "a loss for sure, specifically, as you're building up to the festive season. In terms of quantification, it would be difficult because the vehicles are in much demand, and EVs are growing at 20 per cent already. It has impacted across the industry".

When asked if the company has held discussions with the government on the issue and sought exemptions for the domestic value addition requirements for the PM eDrive and PLI schemes, TVS Motor Company EVP Global Product Planning and Design Manu Saxena said, "The situation is industry wide and all of us are on the same boat on that and that makes life a little bit unpredictable, but the Government of India is doing its bit, and we are in constant conversations with them, and they are doing their bit to kind of ease out that situation."

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Specific to seeking exemptions on domestic value addition requirements, he said, "We have all been speaking to the government, yes, on several aspects."

On the newly launched electric scooter TVS Orbiter, Gupta said it has been built on a platform to serve the requirements of both domestic and global markets, and the company will look to export it at an appropriate time.

TVS invested about Rs 125 crore in the development of the new model, which will be rolled out across India in a phased manner starting from Bengaluru, he added.

The company on Thursday launched its new electric scooter, TVS Orbiter, at Rs 99,900 (ex-showroom, inclusive of PM e-Drive scheme, Bengaluru).