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.

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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.

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Chaitanya Jalan, Executive Director at Ramakrishna Forgings, said the company has not seen a direct impact because it usually passes on cost increases to OEM customers.“If the conflict continues, availability of the raw material will have to be watched,” he said.

The cost pressure from the aluminium shortage comes after the electric two‑wheeler industry posted its best monthly sales ever at INR 200 thousand (USD 2152) units in March, helped by year‑end dispatches and early buying before expected price hikes. 

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Automakers say input costs are higher due to precious metals like silver and platinum, plus rising steel and aluminium prices. TVS Motor’s K N Radhakrishnan said the main pressure is from aluminium, copper, zinc and precious metals such as platinum, palladium and rhodium. The company is using scale, cost controls, product mix and small price hikes to cut the impact.

Bajaj Auto’s Dinesh Thapar said noble metals like rhodium, platinum and palladium are rising, with aluminium and copper also up, and steel stable. Ather Energy’s Tarun Mehta said battery costs are manageable, but the vehicle side is turning volatile.

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Bajaj Auto and Ather Energy have raised prices on some electric two‑wheeler models, while TVS Motor has flagged possible hikes. “You can look at small price increases, but they can’t be fully passed on,” Radhakrishnan said. Neither TVS Motor nor Ather Energy replied to emails on the impact of higher aluminium prices and supply constraints.

Upadhyay said aluminium prices rose about 10 per cent month‑on‑month in March and are 10-12 per cent higher on average in FY26 than FY25. “E2W makers will likely use small price hikes and tighter cost controls to protect margins, as full pass‑through is hard in a price‑sensitive market,” she said.