Indian EV makers are on the verge of facing a real challenge as China cuts the supply of rare earth magnets to the country. The auto makers building EVs, and the EV component manufacturers, all can come under the radar as this rare earth magnet is crucial for EV production.

Why is this important? 

These rare earth magnets are crucial for different parts and components of any electric vehicles and other automobiles as well. Especially when it comes to the traction motors, these magnets play pivotal role. 

What does China have to say?

As per reports, China has stopped the supply of these rare earth magnets to the Indian EV makers from 4 April 2025. According to their new regulations, the exporters of these magnets will only provide the magnets to the EV companies/ manufacturers in India who have an end-user certificate in a format prescribed by the government. Both the Ministry of External Affairs of India and the Chinese Embassy need to authorize the certificate to make the same valid. 

China has come up with these regulations as they do not want India to sell these magnets to any third party further, and especially to ban the use of these magnets in weapons. 

How will this affect Indian EV Makers?

While the motto behind the restriction on the supply of these magnets may not be questionable but the impact can be huge on the EV industry in India. The industry is growing at a significant pace, and cutting down on the supply of these markets can hinder that growth and slow down the production of EVs and disrupt the entire supply chain. India must find ways to produce the source of these magnets from elsewhere to boost the production of EVs. 

Having said that, China is only asking for a certificate that the EV manufacturers once submitted, and they will again get supplies of the magnets. 

Wrapping up 

So, while China’s decision can hamper the growth of the EV industry for a while, eventually, it can be accommodated, and both countries can come to the same page to develop the automobile industry and also reduce the misuse of these magnets otherwise. 

Source: CNBC TV18

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