How Tata Motors e-bus run slowed

Tata Motors Ltd lost the crown of being India’s largest e-bus maker this year, as the rare earth magnet crisis flared and the company turned cautious on public tenders.

- Ayaan Kartik

The maker of Starbus and Ultra sold just 213 units between January and September, down 80% from a year before, a sharp contrast from the previous two years when it led the segment with annual sales above 1,200 units. However, the company has since engaged with the government on magnets, and may reenter the public tender space soon.

Earlier this year, China clamped down on exports of key rare earths that go into permanent magnets used in electric vehicle motors. There are few alternatives for these critical inputs, forcing companies to import fully-made motors, risking their eligibility to secure various local incentives.

The government has since allowed electric truck and bus manufacturers to temporarily import such motors as an interim solution.

The magnet crisis and the public tendering model took a toll on Tata Motors e-bus sales, two executives aware of the matter said.

"There was an impact of the rare earth crisis on the production of the company. Moreover, the company has also had concerns with how state transport units have been looking to procure vehicles, which is pushing the burden of ownership on them," one of the two executives cited above said on the condition of anonymity.

The magnet curbs unfolded while the company was fulfilling a 3,600-bus tender from government-owned Convergence Energy Services Ltd, a Tata Motors spokesperson said.