India's Bajaj Auto warns China magnet delays will hit EV output by July

By Nandan Mandayam

May 29 (Reuters) - Indian automaker Bajaj Auto BAJA.NS on Thursday warned that any further delays in securing the supply of rare earth magnets from China could "seriously impact" electric vehicle production by July.

China controls more than 90% of global processing capacity for the magnets used for automobiles, clean energy and home appliances. The country enacted restrictions in April requiring companies to obtain import permits from Beijing.

Reuters reported on Wednesday that Indian auto industry groups have sought the intervention of Prime Minister Narendra Modi's government to help access magnets held at Chinese ports since April 4.

"We are hoping that in the coming weeks, approvals to ship are secured by exporters from China based on the declarations by our vendors," Bajaj Auto's executive director Rakesh Sharma told analysts during an earnings call on Thursday.

Sharma's comments marked the first public admission of the implication of China's export restrictions on rare earth magnets, which could grind Indian auto production to a halt.

Rare earth magnets are used in electric motors that run EVs as well as parts such as power windows and audio speakers used in traditional cars.

Sharma termed the current situation as "a dark cloud on the horizon" and said while a process for end-use declaration for non-military users has been defined in India, it was yet to be completed in China.

Bajaj Auto manufactures electric scooters under its "Chetak" brand as well as electric three-wheelers.

Earlier in the day, the "Pulsar" motorcycle manufacturer reported fourth-quarter profit above market estimates, as higher motorcycle exports and foreign exchange gains made up for a slump in domestic demand.