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Time of India
5 hours ago
- Automotive
- Time of India
Rare earth magnets: Industry exploring lighter metals, reworking production schedules as govt weighs PLI
HighlightsChina's export halt hits EV supply chains; rare earth magnet stocks may last only till mid-July. Bajaj Chetak halts production briefly, Ather and TVS warn of disruptions; Hero, Tata, MG unaffected so far. OEMs explore stopgap options like importing motors or redesigning magnet-free systems, but face challenges. Govt mulls PLI scheme, mining boost, but solutions likely to take time. The US reached an agreement with China for uninterrupted supplies of rare earth magnets last night, but Indian OEMs will likely have to wait longer. Rare earth elements like samarium, gadolinium, terbium, dysprosium, and lutetium are essential for making permanent magnet synchronous motors (PMSMs), which is a key component for electric vehicles (EVs) and hybrids. These motors are also used in electric power steering and other auxiliary systems in internal combustion engine (ICE) vehicles. Since April four this year, China - which accounts for an overwhelming 80% of rare earth magnet supplies for Indian automobile OEMs - has stopped approvals for exports of this critical component. While negotiations are happening between the two governments, as per industry sources, on easing the export curbs from China, there is no light at the end of the tunnel yet. A component industry leader said supplies of rare earth magnets 'are precariously low with component manufacturers. The situation remains the same (despite the US getting a reprieve) and no Indian company has been given a license for importing these magnets yet. We are keeping our fingers crossed and hoping for the best'. We will start seeing production challenges very soon. With US, it was a trade issue but with India, China has a geopolitical issue which is yet to be veteran Another industry veteran said 'we will start seeing production challenges very soon. With US, it was a trade issue but with India, China has a geopolitical issue which is yet to be resolved.' A prominent dealer, of several brands across passenger vehicles and two wheeler categories, said that Bajaj Auto may be suspending production of its electric vehicle (EV) brand Chetak for a week, till June 17. 'This may be partially due to the rare earth magnet issue and also due to some design changes they are introducing. We were told that there is no production between June 11 and June 17,' he said. This dealer also indicated that Ather Energy , a pure play electric two wheeler brand, has stocks of the rare earth magnets for only a month more. Neither Bajaj nor Ather confirmed these developments. Also read: Maruti Suzuki denies operational impact amid rare earth magnet concerns The dealer quoted above also said that Hero MotoCorp (which sells VIDA electric two wheelers) has not indicated any production schedule changes as of now. But TVS Motor Company has already warned of production disruptions and even price increases due to the rare earth magnet supply issue beginning next month. According to CRISIL, Indian auto component manufacturers/ OEMs are exploring several options to mitigate the risks posed by rare earth magnet supply disruption. These include (a) importing fully assembled motors from China, (b) shipping the rotors, on which the rare earth magnets are mounted, to China for magnet assembly and then re-importing the assembled rotors, (c) substituting rare earth magnets with alternatively engineered materials aimed at achieving similar magnetic performance as rare earths without crossing the threshold that would classify them as rare earth magnets, (d) introducing rare earth magnet-free motors and instead switching over to motors that rely on electromagnets or other inductive mechanisms. These workarounds, however, come with logistical, regulatory and engineering complexities. Implementing some of the above alternatives would also involve accelerating the development, testing, and validation cycles to minimise production disruptions. Magnet issue blessing in disguise? But, for the passenger vehicle internal combustion engine industry, the rare earth magnet supply issue may have come as a blessing in disguise. The PV ICE vehicle dealers are currently bearing inventories of up to 50 days, double the normal level. So any potential disruption in production of ICE passenger vehicles is unlikely to bother the industry in the short term. But for electric PV OEMs, there is reason to worry. While Tata Motors, MG and Mahindra & Mahindra - three of the biggest OEMs for electric PVs - have not indicated any impact of the supply issue till now, industry experts expect these OEMs to be under pressure in the coming weeks if the magnet supply issue is not resolved. Maruti Suzuki India , which expects to shortly launch its first electric vehicle, has said that while there is no disruption in operations as of now due to the rare earth magnet supply issue, 'there is a lot of uncertainty, the situation is continuously evolving'. Heavy rare earth magnets are better performance as compared to less heavy rare earths. If the latter are used, each electric vehicle will need more magnets to achieve the same level of Thakkar Hemal Thakkar , Senior Practice Leader and Director at Crisil Research, pointed out that for electric two wheeler OEMs, while value wise the magnets account for negligible share of just Rs 150-200 per vehicle, this tiny part is indispensable. He also explained that while the present constraint in supplies from China applies to specific rare earths, alternatives can be developed. 'Heavy rare earth magnets are better performance as compared to less heavy rare earths. If the latter are used, each electric vehicle will need more magnets to achieve the same level of performance. This will also mean more space is needed for the magnets, ultimately needing a redesign of the electric motor. All this will take time, at least a couple of months. So alternatives can be found but not immediately'. Industry wants govt intervention As the automobile industry seeks meaningful intervention from the government, there are indications that the Ministry of Heavy Industries is looking at an incentive plan to boost domestic production on rare earth magnets through fresh production linked incentive ( PLI ) scheme. Plans are also afoot to improve domestic availability of critical minerals through increased mining through state owned firms. Also read: Rare-earth magnet supply concerns may disrupt auto production by July: ICRA There is also some talk of letting the private sector explore rare earths. While the intent is supportive, the operationalisation of these plans will take time. Thankkar of Crisil Research said that 'The PLI initiative is a good move but this will take some time to be implemented, since interministerial consultations etc are needed'. Also, some Indian companies are exploring ways to build magnet free motors. So while the OEMs are looking for various options, it is for the governments of the two countries to resolve the matter quickly. Otherwise India's green ambitions may take a temporary hit.
Time of India
29-04-2025
- Automotive
- Time of India
Automotive dealer Anil Garg of Shiva Auto passes away
New Delhi: Anil Garg , the founder of the Noida and NCR-based dealership conglomerate Shiva Auto Group, passed away on Tuesday morning. Garg began his entrepreneurial journey in 1972 with an authorised service and spare parts dealership for Bajaj Auto in Ghaziabad. In 1987, he expanded the venture as an authorised sales dealer for Bajaj, laying the foundation for what would grow into a diversified automotive group. Growing along with Bajaj, in 1995 Shiva Group was appointed as the C&F genuine spares for Uttar Pradesh region. Over the decades, Garg guided the business through significant milestones, including securing the General Motors dealership in 2004 and the Mahindra dealership in 2009. A Mechanical Engineer by qualification, he brought over 41 years of deep industry insight and operational excellence to his ventures. Known for his steadfast commitment to customer satisfaction and a leadership style, he earned widespread respect across the industry. His legacy continues through his son, Amit Garg, who joined the business in 1997 and currently serves as Director of the Group. Under Amit's leadership, the Shiva Auto Group expanded its portfolio to include brands such as Jaguar Land Rover (JLR) , Triumph and KTM bikes, Bajaj Chetak scooters, and Bajaj three-wheelers . 'I had the good fortune of knowing him for over three decades. His humility and customer orientation were legendary– qualities that are sharply etched in my memory,' said auto industry veteran Arun Malhotra. Industry veterans say Garg's contributions to the auto dealership ecosystem leave a lasting imprint, both through the scale of his enterprise and the values he instilled in it.
