Ola Electric and Tata Motors Shares Jump as China’s Assurance Boosts Auto Stocks

Ola electric and Tata Motors stocks gain on Chinese support

Autos sector shares in stock market recorded heavy buying in the current stock market. Shares of Ola Electric, Bajaj Auto, Hero MotoCorp, Hyundai Motor, Eicher Motors and Maruti Suzuki rose up to 6 percent in the intraday trade. The Nifty Auto Index also advanced by almost 1.5%, a day after advancing by over 5 percent on the basis of the reduction in GST that might occur. Due to reduced GST, the auto demand can be supported and recently, the new promise made by China has added another mojo to the auto stocks. The Nifty Auto Index has soared beyond 11 percent as of writing in 2025.

The reason Chinese gave some support to the Auto Stocks?

The Chinese Foreign Minister, currently on a visit to India has assured that China will respond to concerns of the provision of rare earth magnets. The cars industry largely relies on these magnets in engines during the manufacturing of EVs, sensors and other primary devices, and grinders in tunnel boring machines.

Such assurance is important since China dominates about 90 percent of the world rare earths production and supply. When there is any form of disturbance in the supply, it has a direct impact on the auto companies all over the world.

What the Auto Companies are Up Against

Auto companies are already beginning to experience production hiccups as a result of the scarcity of rare earth magnets:

• In July 2025, Bajaj Auto had to reduce its production of electric two-wheeler almost by one half. The company also cautioned the production can be constrained during August and September.
• Speaking at its June quarter earnings call, Hero MotoCorp had acknowledged that the shortage of supply is a problem facing the industry as a whole. But, the firm maintained that it has an adequate stock of both ICE vehicles (fuel-based) and the electric vehicles still up to the end of the second quarter of FY2025. Rare earth magnets also used in EV motors, engines, and wheel sensors were also mentioned by Hero. Although this supply is safe in the present moment the company has embarked in seeking alternative sources in future.
• This impact is also on Tata Motors, one of the largest in India in this EV market. The company is currently seeking long-term supply sources although its production has not yet been hit.

In case the assurance by China is genuine, then auto firms will have a reprieve regarding the production aspect. Coupled to this is the potential reduction in GST which may spur the demand position in the months ahead further strengthening the auto industry.

Also Read : Astral Shares Plunge 9% After Q1 Results – Biggest Drop in 3 Years, 5 Key Reasons Explained

Disclaimer: The present article is not a professional opinion. Investments in the stock market are risk taking. Please seek the advice of a financial advisor before investing.