Ather Energy CEO flags supply disruption in Q2 on rare earth magnet crisis

Electric two-wheeler (E2W) maker Ather Energy expects a short-term disruption in its supply chain in the second quarter of FY26, owing to China’s export restrictions on rare earth magnets, a key component used in electric vehicle (EV) motors.

Tarun Mehta, cofounder and CEO of Ather, while speaking at the company’s quarterly earnings call, said the company could face a shortfall of up to seven days' worth of supply during the quarter, which may affect its ability to meet dealer demand. While production is not expected to come to a complete halt, the disruption could affect wholesale volumes and, to some extent, retail sales.

“In the short term, which is this quarter, there could be an impact of about a week odd in terms of potential business impact,” said Mehta. “When I say seven days of impact, the right way to see this would be not like production stopped for seven days, but a possible gap in our ability to supply our dealers' demand for up to about a week for this entire quarter.”


Mehta noted that the company’s retail operations will also be affected, particularly as channel inventory remains lean. “I would be amiss if I say this will have no impact on retail, because the channel stocks are not that high.”

The company has been working to reduce the disruption through research and development (R&D) and supply chain adjustments. The gap was more severe a few months ago, but Mehta said internal efforts have helped narrow it.

The timing of the disruption could be challenging for Ather as it ramps up production and dealer expansion ahead of the festive season. The company sold 46,078 scooters in Q1 FY26, up nearly 100% year-on-year (YoY), and reported a 79% on-year rise in revenue to Rs 644 crore.

The company is currently the fourth-largest E2W manufacturer in India, with a 16.5% market share in July, according to data from the Vahan portal, trailing behind TVS Motor, Bajaj Auto, and Ola Electric.