Green Revolution at Risk: EV Manufacturers Sound Alarm Over Rare Earth Magnet Squeeze

India’s electric vehicle (EV) industry is sounding the alarm over a looming shortage of rare earth magnets, a critical component for EV motors, following China’s recent tightening of export controls. Several leading EV manufacturers and industry bodies have formally approached the central government, seeking urgent intervention to ensure a stable supply of these essential materials and prevent disruption to India’s ambitious green mobility goals.

 

The crisis was triggered by new Chinese regulations, effective since April 4, which require Indian importers to provide detailed end-user certificates for every shipment of rare earth magnets. These certificates must be endorsed by both India’s Ministry of External Affairs and the Chinese Embassy, with strict assurances that the magnets will be used solely for civilian automotive purposes and not for military applications or third-party transfers. The process has become increasingly cumbersome, causing significant delays and raising the risk of acute shortages as inventories dwindle.

 

Rare earth magnets, especially neodymium-iron-boron (NdFeB) types, are indispensable for manufacturing efficient and compact EV motors, as well as other components like power steering and braking systems. China, which controls up to 90% of global rare earth processing, remains the primary supplier despite India’s own reserves remaining largely untapped due to limited domestic extraction and refining capabilities.

 

Industry groups, including the Society of Indian Automobile Manufacturers (SIAM), are urging the government to negotiate a streamlined import process, possibly through a one-time, six-month clearance for key importers. They warn that without swift action, production delays, cost increases, and a setback to India’s EV ambitions are imminent. The industry is also exploring alternative sources and domestic recycling, but acknowledges that building self-reliance will take time.

 

The government is now under pressure to coordinate with Chinese authorities and streamline documentation to safeguard the future of India’s fast-growing EV sector.

 

Source: The Hindu Business Line