Rare earth magnets crisis: Impact of China's export curbs on Indian automobile industry
Rare earth magnets are integral to Permanent Magnet Synchronous Motors (PMSMs) used in EVs for their high torque, energy efficiency and compact size.
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New Indian Express
13 hours ago
- New Indian Express
Rare earth magnet crisis: A dent in Indian auto sector
The Indian automotive sector, particularly its electric vehicle (EV) segment, is grappling with a looming supply-chain disruption due to China's stringent export restrictions on rare earth magnets. These low-cost yet functionally critical components are indispensable for modern vehicles, and their scarcity threatens to impact production, new model launches, and the industry's ambitious growth trajectory. What are Rare Earth Magnets and why are they critical? Rare earth magnets are made from alloys of rare earth elements. They are integral to Permanent Magnet Synchronous Motors (PMSMs), which are widely used in EVs for their high torque, energy efficiency, and compact size. Hybrid vehicles also rely on them for efficient propulsion. In Internal Combustion Engine (ICE) vehicles, their use is primarily limited to electric power steering and other motorized systems. Elements like Dysprosium (Dy), Terbium (Tb), Neodymium (Nd), and Praseodymium (Pr) are crucial for these magnets, especially in high-performance applications. China's dominance and new restrictions China is the world's dominant exporter of rare earth magnets, controlling over 70% of global Rare Earth Element (REE) production and over 90% of refining capacity. In April 2025, Beijing imposed stricter export controls on seven rare earth elements and finished magnets, mandating export licenses. This revised framework demands detailed end-use disclosures and client declarations, including confirmation that products will not be used in defense or re-exported to the US. This added scrutiny has prolonged the clearance process to at least 45 days, leading to significant delays and a growing backlog that is tightening global supply chains. Impact on the Indian automotive sector India, which sourced over 80% of its approximately 540 tonnes of magnet imports from China last fiscal year, has begun to feel the pinch. By the end of May 2025, despite nearly 30 import requests from Indian companies being endorsed by the Indian government, none had received approval from Chinese authorities, and no shipments had arrived.
Deccan Herald
21 hours ago
- Deccan Herald
Rare earth magnets crisis: Impact of China's export curbs on Indian automobile industry
Rare earth magnets are integral to Permanent Magnet Synchronous Motors (PMSMs) used in EVs for their high torque, energy efficiency and compact size.
Time of India
a day ago
- Time of India
India may ease EV localisation norms amid China's rare earth export curbs
India is considering a relaxation of its stringent 50per cent localisation requirement for electric vehicle (EV) makers and suppliers in light of China's recent curbs on rare earth exports, according to people familiar with the matter told Bloomberg. While the Society of Indian Automobile Manufacturers (SIAM) has not yet submitted a formal request to lower the threshold, industry representatives have raised the issue during consultations with the government, the sources said, requesting anonymity due to the private nature of the discussions. China, the dominant global supplier of rare earth minerals, imposed restrictions in April on the export of these critical materials, which are used in the production of permanent magnets essential for EV traction motors. The move has disrupted supply chains and posed a challenge to India's localisation goals under the Production Linked Incentive (PLI) scheme. Indian auto industry's urge In response, the government has advised automakers to temporarily import fully-built traction motors or their sub-assemblies to circumvent supply bottlenecks, sources added. The Ministry of Heavy Industries has not yet commented publicly on the issue. Suppliers and manufacturers are reportedly scrambling to secure alternative sources and are working on expensive workarounds to continue production. However, a prolonged disruption in the availability of rare earth materials could severely impact the ability of automakers to meet the localisation mandates tied to the PLI scheme, which offers financial incentives to promote domestic manufacturing. The PLI program is part of a broader government effort to reduce reliance on imports across key sectors, including electronics, textiles, semiconductors, and EVs. Despite the push for self-reliance, China's control over the rare earth supply chain leaves Indian original equipment manufacturers (OEMs) with limited options. According to the people familiar with the matter, some automakers are already exploring the possibility of importing fully assembled motors or critical sub-assemblies directly from China to ensure production continuity. India's potential move to soften localisation norms could provide short-term relief to EV manufacturers, though it also underscores the country's dependency on critical materials from China and the urgent need to develop resilient, localised supply chains.
