Eicher Motors says rare earth shortage hit Royal Enfield output in Q1FY26

The company added that they are looking for alternatives to deal with the shortage, a move that other two-wheeler makers such as TVS Motor and Ola Electric are also exploring

Eicher Motors, which manufactures Royal Enfield bikes, on Thursday said that a shortage of rare earth magnets impacted the production of some of its performance motorcycles during the first quarter of the financial year 2025-26 (Q1 FY26), Reuters reported.

 

The shortage is attributed to China’s export restrictions on rare earth magnets, imposed earlier this year.

 

The company added that it has begun transitioning to alternative materials.

 

“We started working on the alternative material... at least about three or four months back. Now (the import of) that alternative material is not a major issue,” Eicher Managing Director B Govindarajan told analysts during a post-earnings call, as quoted by Reuters.

 

 

The models that were impacted due to the shortage include the Himalayan, Scram, and newly launched Guerrilla, the report added.

 

Other Indian manufacturers, such as TVS Motor and Ola Electric, are also exploring alternatives to rare earth magnets. A senior Maruti Suzuki executive described the shortage as a ‘challenging situation’ and said engineers are actively working to minimise its impact. 

 

China controls 90 per cent of the global production of rare earth magnets and more than 70 per cent of rare earth elements, which go into the making of magnets.

 

Eicher Motor Q1 FY26 result

 

Eicher reported a 9.4 per cent year-on-year rise in consolidated net profit to ₹1,205 crore for the quarter ended June 30. The company's revenue from operations rose 14.8 per cent to ₹5,042 crore, its highest ever for a first quarter, while earnings before interest, taxes, depreciation, and amortisation (Ebitda) increased to ₹1,203 crore.

 

Royal Enfield recorded a 14.7 per cent growth in sales, delivering 261,326 motorcycles in Q1 FY26, compared to 227,736 units in the same quarter last year.

 

Meanwhile, VE Commercial Vehicles (VECV)—a joint venture between Eicher and Volvo Group—posted revenue of ₹5,671 crore, up 11.9 per cent year-on-year. VECV’s Ebitda rose 32.6 per cent to ₹511 crore, as it sold 21,610 vehicles during the quarter, compared to 19,702 in the previous year.