E-Two-Wheeler Makers Face Cost Pressure as Aluminium Shortage Hits Profitability

Electric two-wheeler (E2W) manufacturers are facing mounting cost pressures in April following a record March sales of 1.91 lakh units, as a global aluminium shortage pushes input prices to multi-year highs. London Metal Exchange prices have surged to $3,500–$3,600 per tonne, while domestic rates rose to ₹358.7/kg — up ₹35–45 since February — due to supply disruptions from Gulf tensions and force majeure at major smelters like Alba (Bahrain) and Emirates Global Aluminium. Aluminium is critical for EVs, used in lightweighting, battery packs, motors, and body components. While companies like TVS Motor, Bajaj Auto, and Ather Energy are adopting cost controls, material substitution, and selective price hikes, full pass-through remains difficult in India’s price-sensitive market. TVS and Bajaj have already implemented modest increases, with TVS citing pressure from aluminium, copper, zinc, and precious metals like platinum and rhodium. Crisil Ratings expects OEMs to rely on calibrated pricing, scale, and operational efficiency to protect margins. Though current strategies may cushion the blow, prolonged disruption could threaten profitability and demand momentum. With commodity inflation persisting, the sector’s ability to balance affordability and sustainability will be key in the coming quarters.