China’s recent restriction on rare-earth magnet exports is creating a sharp supply crunch. Starting in July 2025, Indian EV manufacturers—Bajaj, Ather, and TVS—report production disruptions and even temporary halts. These magnets are essential for electric vehicle motors, and remaining inventories are expected to run dry soon
🚗 Who’s Affected?
- Bajaj Auto: Warned production could drop as early as July. Stock depletion is imminent and disrupts upcoming EV variant launches
- TVS Motor: MD Sudarshan Venu cautioned that shortages may stall EV output starting June–July, potentially leading to price hikes
- Ather Energy: Though not named individually, it’s part of the broader EV industry scarcity flagged in reports
📉 Why This Matters
- Motor Production Hits: Permanent magnet synchronous motors (PMSMs)—integral to EVs and power steering—rely heavily on rare-earth magnets, primarily imported from China
- Rising Costs & Redesign: Magnet prices are up ~15–20%. OEMs are scrambling for alternatives like importing assembled motors—solutions that are slower and costlier
🛠️ Industry & Government Response
- Workarounds Under Review: Options include assembling motors abroad or developing magnet‑free designs, though these require significant reengineering financialexpress
- Government Steps: India is planning domestic production through a PLI scheme, mining incentives, and EUC approvals for import certification—still awaiting final execution
📋 Impact Snapshot
| Company | Production Risk | Timeline |
|---|---|---|
| Bajaj Auto | High | From July |
| TVS Motor | High | From June–July |
| Ather Energy | Moderate-to-High | Soon |
🔮 Outlook
- 📌 Short-term: Expect EV production dips and potential price boosts mid‑2025.
- ⚙️ Mid-term: R&D on magnet‑free motors or alternate supply chains may take months.
- 🏗️ Long-term: Government PLI grants and domestic capabilities may reduce China reliance.
📌 Conclusion
The rare earth magnet shortage EV India crisis underlines a broad dependency on Chinese imports. With Bajaj, Ather, and TVS already feeling the impact, the industry must pivot quickly or risk derailing India’s EV momentum.
