TVS continues to flag rare-earth magnet crisis, hopes GST reforms to boost H2 sales
TVS Motor Co. Ltd, India’s third-largest two-wheeler maker, on Tuesday reiterated short- to medium-term concerns over the availability of rare-earth magnets, calling it a key challenge for its electric vehicle (EV) business.
However, it said, while announcing the September quarter results, the recent goods and services tax (GST) rate cut—fully passed on to customers—is expected to have a “multiplier effect”, supporting sales growth in the December and March quarters.
The EV business
In the second quarter of 2024-25, the company’s EV sales—e-scooters, e-motorcycles, and e-auto rikshaws—grew by 15% sequentially to 80,000 from 70,000. EV sales stood at 75,000 in the year-ago quarter.
“(Rare-earth) magnet availability continues to pose challenges in the short to medium term,” the management said during the post-earnings investor call.
“So, possibly if the magnets were available, I am very sure the industry would have done much, much bigger. It is only 8% growth," said K.N. Radhakrishnan, director and chief executive, TVS Motor.
Demand for EVs continues to be strong, he added. Turnover from the EV business was around Rs.1,269 crore, and the “contributory margins in the segment were positive”.
The GST rate cut boost
The GST rate cuts are expected to boost demand in the second half of the fiscal year across various categories.
“GST reforms will help rural sales. Overall, I am confident rural will start growing in line with urban, and you will see the growth in the coming days,” Radhakrishnan said.
