A global aluminium shortage is likely to lower electric two‑wheeler margins in India, as prices close to four‑year highs push up production costs and lead to some price hikes. Supply problems in the Gulf and higher commodity prices put pressure on EV affordability, while makers try to manage costs, prices, and demand in a competitive market.
Electric two‑wheeler makers are bracing for a tough April after record sales in March, as a global aluminium shortage threatens to push up production costs, squeeze margins, and lead to price hikes that could weaken consumer demand.
Aluminium prices are around USD 3,500-3,600 per tonne on the London Metal Exchange, near four‑year highs. This is driven by supply shocks linked to geopolitical tensions in the Gulf and disruptions at key smelters such as Emirates Global Aluminium and Aluminium Bahrain (Alba).
Poonam Upadhyay, Director at Crisil Ratings, said, “Auto and auto component makers are evaluating production optimisation, greater use of recycled aluminium and alternative materials to manage the situation.” She added that the immediate impact is on sourcing and costs, with production risks if the supply constraints continue.
Bahrain’s Alba, one of the world’s biggest aluminium smelters, has stopped some deliveries and cut output by 19 per cent, saying it cannot ship through the Strait of Hormuz. In India, aluminium prices have gone up by about INR 35-45 (USD 0.38-0.48) per kg since late February to around INR 358.7 (USD 3.86) per kg, making inputs more expensive. Aluminium is still key to EV design because it helps make vehicles lighter and manage heat, and is used in battery packs, motors, inverters and main body parts.