Matter Motor Works hunts for new tech as rare earth stocks deplete

Business Standard

4 days ago

Electric motorcycle startup Matter Motor Works has enough rare earth magnets to sustain production for three to four months but is actively exploring alternatives, said Founder Arun Pratap Singh in an interview with Business Standard on Thursday. The Ahmedabad-based firm, which has raised $75–80 million since 2019, is working to avoid supply disruptions following China's curbs on rare earth exports.
'Not today. We've got stock for three to four months. But it will become a problem,' Singh said when asked about the impact of the shortage.
'I was in China sometime back. We had a meeting with our supplier. We thought we had a solution, but today, that solution is not working. We're trying to talk to them and find a way forward,' said Singh, who is the group chief operating officer of the company.
He added that Matter currently imports only three critical components: rare earth magnets, battery cells, and semiconductor chips — all of which are not manufactured at scale in India. 'Everything else, we have here in India,' he said.
'We have stock for three to four months... then we will have a problem. So for me, the target is to solve this shortage issue within the next two months so that our production is not impacted,' he said.
To address the looming supply challenge, Matter is evaluating magnet technologies that do not rely on rare earth elements. 'There are magnet manufacturers in the world who are developing magnets without these rare earth minerals. There are different technologies. We're talking to them too, and at the right time, we will switch over from these magnets,' he said.
Launched in October 2024, Matter's first product — the Aera electric motorcycle — is currently sold in Ahmedabad, Jaipur, Bengaluru, Pune, and Delhi. The company plans to expand to 30 outlets across 20 cities by August and has set a sales target of 10,000 units for the current financial year (2025-26), scaling up to 50,000–60,000 units next year.
According to Singh, non-rare earth magnets are only 5–7 per cent costlier and offer similar performance — making them a viable alternative as Matter ramps up production.
China, which controls a sizeable share of global rare earth supplies, imposed export controls on several critical elements in April, citing national security concerns. These include samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium — metals used in high-performance magnets — along with related alloys and components.
The Aera is priced at ₹1.93 lakh for the base model (Delhi ex-showroom). Singh acknowledged that a petrol bike offering similar performance would cost about ₹30,000 less but said electric bike buyers can recover that through lower fuel costs. 'The customer understands that electricity is a cheaper and more predictable fuel,' he said.
Matter is also in the process of applying for subsidies under the central government's PM E-DRIVE (Electric Drive Revolution in Innovative Vehicle Enhancement) scheme. This support could lower the effective cost of the bike by another ₹5,000. 'Government support is important for customer confidence, but it is not a primary factor in our pricing,' Singh observed.
Matter is targeting younger riders between the ages of 18 and 24, banking on design, performance, and long-term affordability to build traction in the competitive electric two-wheeler market.