EV makers counter magnet shortage in festive season production with local sourcing, new technologies

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The EV makers have not yet informed the government about volume of stocks of rare earth magnets currently available with them.
| Photo Credit:
Doug Kanter

Electric vehicle (EV) manufacturers are sourcing locally available resized magnets or managing supplies from countries like South Korea after China imposed export restrictions so that there is no interruption on production ahead of the festive period.

K N Radhakrishnan, Director and Chief Executive Officer, TVS Motor Company, said at a post-earnings call, “Short term, we are managing with the stocks what we have. We also resized some higher sized magnets, which are locally available. We are also exploring some alternate strategies in the short term… currently, we are managing the daily production. We are just able to manage like that.”

Similarly, Ather Energy noted that retail sales could take a hit due to low stock, but the company was planning to mitigate this through channel inventory management and alternate sourcing strategy.

At its post earnings call, Tarun Mehta, Executive Director and CEO, Ather Energy, said that Ather was exploring several mitigation options, which includes- partially assembling motors in China to avoid direct magnet imports, transitioning to heavy rare-earth-free magnets, and shifting entirely to ferrite-based motor technologies, which eliminate rare earth usage.

“As far as the rare earth metal is concerned, it is an industry-wide phenomenon. It is a challenge, no doubt about that… we are covered for the Q2 FY26 for both ICE and EV and we continue to work on alternatives, and we will try and see that we circumvent the problem, Vikram Kasbekar, the Acting CEO at Hero MotoCorp said.

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The EV makers have not yet informed the government about volume of stocks of rare earth magnets currently available with them.

The Ministry of Heavy Industries (MHI) had even sent directives last month asking OEMs to declare rare earth magnet inventory so that the real crisis could be measured. However, no OEM has sent a response to the MHI till date.

This is the reason why the Ministry halted subsidies last month to the OEMs for both Production Linked Incentive (PLI) scheme and the Prime Minister Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE).

“They have not shared their sources with us yet,” a senior official at MHI told businessline. Sources from the MHI also said that a call is not taken yet to resume the subsidies under both the schemes, until the level of scarcity of rare earth magnet is known.

The government is also exploring alternative supply channels and domestic sources to reduce dependence on China. “We are also finding ways and means by which the supply chain does not get impacted. Efforts are on,” a senior government official said recently.

The Centre has also earmarked ₹1,345 crore to incentivise rare earth magnets production in India and the scheme will provide end-to-end support for the conversion of rare earth oxides into magnets.