The Silent Bottlenecks Slowing Down India’s EV Push

Recent news highlights a significant and growing impact of rare earth magnet shortages on the electric vehicle (EV) industry, particularly due to new export restrictions imposed by China in April 2025. These magnets—especially neodymium-iron-boron (NdFeB) types—are essential for the high performance, torque, and efficiency of EV motors. Below is a synthesis of the latest developments and their implications:

Key Points:

Supply Chain Risk: China controls over 90% of the global rare earth magnet production and imposed new export licensing requirements and stricter scrutiny in April 2025. This move has caused prolonged delays (minimum 45 days for clearances), leading to mounting shipment backlogs and tighter supply chains globally.
Immediate Impact on India: Over 80% of India’s rare earth magnet imports came from China last fiscal year. No new shipments had arrived as of late June 2025, causing automakers to warn that inventories could run dry by mid-July. India’s auto sector—particularly the rapidly growing EV segment—is at risk of production disruptions or deferrals, with key players such as Bajaj Auto, Ather, and TVS announcing output cuts. Maruti Suzuki, for example, has reduced planned production of its new e-Vitara EV model.
Importance in EVs: Rare earth magnets, while comprising less than 5% of a car’s total cost, are integral to permanent magnet synchronous motors (PMSMs) that power most EVs and hybrids. They are also crucial for electric power steering, braking, and other automotive systems—across both EVs and internal combustion engine (ICE) vehicles.
Potential for Production Slump: If the shortage persists, up to 6-7% of quarterly EV production in India could be affected, especially for premium and high-performance vehicles.
Industry Response: Automakers are now seeking alternative suppliers from countries like Vietnam, Indonesia, Japan, Australia, and the US, and optimizing inventories. India is also increasing efforts to localize magnet production and reduce its dependence on imports, with increased investment and R&D into rare-earth-free motor alternatives.youtube
Geopolitical and Strategic Considerations: The crisis is prompting calls for a national critical materials strategy in India, as supply chain fragility in rare earths poses a risk not only to EV ambitions but also to national energy security and broader industrial competitiveness.
Short-Term Variability: While some companies such as Ola Electric claim to have enough inventory and are not yet affected, most others face severe disruptions.

Caveats and Evolving Situation:

The situation is rapidly evolving, with government interventions, alternative sourcing, and R&D potentially altering the medium-term impact.
The shortage currently affects Indian automakers most visibly, but global EV production may also be at risk if the supply squeeze continues or expands.

In summary, rare earth magnet shortages, driven by China’s export controls, have become a material threat to EV production and rollout schedules, especially in India, forcing urgent industry contingency measures and prompting renewed policy focus on supply chain resilience and material self-sufficiency.

Disclaimer: Prices, specifications, mileage figures and feature lists cited in this article are based on publicly available information as of July 2025 and may change without notice. Always confirm the latest details with authorised dealers or the manufacturer before making a purchase decision. This content is for general informational purposes only and should not be taken as financial, technical or legal advice. Neither the author nor this website assumes any liability for actions taken based on the information provided.

Mileage Disclaimer: All mileage figures mentioned in this article, including ARAI-certified and real-world fuel efficiency numbers, are indicative and may vary significantly based on actual driving conditions, rider weight, vehicle maintenance, road conditions, traffic patterns, riding style, fuel quality, weather conditions, and individual vehicle variations. ARAI (Automotive Research Association of India) test figures are obtained under controlled laboratory conditions and may not reflect real-world performance. Actual mileage typically ranges 10-30% lower than ARAI figures depending on usage patterns. Urban city riding generally delivers lower mileage compared to highway cruising at optimal speeds. Regular maintenance, proper tire pressure, quality fuel, and smooth riding techniques can help achieve better fuel efficiency. The mileage figures quoted from user reviews and owner reports represent individual experiences and should not be considered as guaranteed performance standards. Always test ride with a helmet and evaluate real-world performance before making a purchase decision.

References:

The Silent Bottlenecks Slowing Down India’s EV Push

Related Posts