Rare-Earth Magnet Crisis Sparks Introspection as China’s Dominance Exposes Harsh Realities and Drives the Urgent Search for Global Alternatives
- A Global Shift Toward Rare-Earth-Free Motors
- Multiple Technical Routes to Magnet-Free EV Technology
- Recyclers Warn: Rare-Earth Magnets Are Still Too Critical to Replace Overnight
- US and EU Push Back; India Steps In With Its Own Strategy
- Recycling: A Crucial Piece of India’s EV Component Strategy
- Are Recycled Rare Earths Enough? Not Yet, Say Innovators
- One Sector, Two Paths — And India Needs Both
- The Road Ahead
India’s electric mobility sector is entering a decisive phase, one driven not by batteries or semiconductors this time, but by something far more inconspicuous — magnets. Long ignored and tucked quietly inside essential devices, magnets have suddenly become the centrepiece of a global geopolitical and technological contest.
From school lessons on how opposite poles attract to their omnipresence in EV motors, smartphones, cooling systems, industrial machinery, wind turbines and more, magnets have always been indispensable. Yet, the world assumed their supply chains to be limitless. That illusion now stands shattered.
In 2025, the scarcity of rare-earth materials — the backbone of high-performance magnets — has turned into one of the most pressing challenges for EV manufacturing globally, and India is no exception. Rising demand, geopolitical tensions, and China’s tightening export controls have exposed the fragility of the world’s dependence on these minerals.
To assess where India stands and how the industry is responding, ETAuto spoke to Attero, one of India’s leading e-waste recyclers, and Chara Technologies, a rare-earth-free motor manufacturing startup. Their insights reveal the competing paths India must navigate to secure future EV readiness.
A Global Shift Toward Rare-Earth-Free Motors
“Rare earth-free technology is not the future; it is already here,” says Bhaktha Keshavachar, Co-Founder and CEO of Chara Technologies, emphasising that the world has already entered the era of magnet-free EV motors.
According to him, rare-earth-free motors are no longer experimental concepts — they are being deployed commercially in both Indian and international markets. The performance and efficiency meet OEM standards, and the technology is certified and market-ready.
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OEMs, he adds, are actively looking for alternatives because the rare-earth supply chain is heavily concentrated, environmentally damaging, and vulnerable to geopolitical shocks. This has led to rare-earth-free motors becoming a multi-billion-dollar industry, with Asia and Europe driving adoption.
“At Chara, over 70 companies have tested our motors,” he notes, “and eight have already moved into production-level deployment.”
For decades, ferrite magnets dominated industry demand, until rare-earth magnets took over due to their superior density, power and efficiency. But with rare-earth supplies under pressure, the question resurfaces — is it time for ferrite magnets to make a comeback?
Multiple Technical Routes to Magnet-Free EV Technology
Keshavachar clarifies that rare-earth-free does not automatically mean a return to ferrites. Several alternative motor architectures eliminate permanent magnets entirely.
These include:
- Externally Excited Synchronous Machines (EESM)
- Switched Reluctance Motors (SRM)
- Synchronous Reluctance Motors (SynRM) with or without ferrites
- Emerging solutions such as Iron Nitride (FeN) magnets
- Even experimental concepts like electrostatic motors
“Ferrites are only one path — not the default destination,” he asserts.
Why Magnet-Free Makes Economic Sense
In a permanent magnet synchronous motor (PMSM), magnets contribute nearly 40% of total motor cost. Removing them dramatically reduces cost volatility.
Over time, rare-earth-free motors are 10–15% more cost-efficient and far easier to manufacture locally. This strengthens domestic value addition and reduces import dependency, a key concern for Indian EV makers.
Fundamental Technology Difference
- Permanent magnet motors rely on strong neodymium or dysprosium-based magnets.
- Reluctance motors use rotor geometry and advanced control algorithms to generate torque.
“We achieve the same performance without being hostage to rare-earth supply risks,” Keshavachar says.
Across mobility and industrial sectors, modern magnet-free motors now match conventional PMSMs in efficiency and reliability. This shift gives OEMs a measure of resilience against global supply disruptions.
Recyclers Warn: Rare-Earth Magnets Are Still Too Critical to Replace Overnight
On the other side of the spectrum is Nitin Gupta, CEO and Co-Founder of Attero, who offers a sharply contrasting view.
“Rare-earth magnets remain technologically superior,” Gupta asserts. “They offer a higher magnetic field in a smaller mass, making them the preferred choice for compact, high-performance EV motors.”
China’s Dominance Is the Real Problem
Over 15 years, China aggressively captured the rare-earth magnet market by scaling production heavily and tolerating weak environmental regulations. Today:
- China controls more than 95% of global rare-earth magnet supply
- It dominates the refining and separation of critical materials like dysprosium, neodymium, and praseodymium
“This gives China the power to influence the world’s EV and electronics supply chains, including India’s,” Gupta warns.
Rare-earth mining is highly polluting, pushing countries like the US and EU to halt most domestic extraction. China filled the vacuum — and now uses its dominance strategically.
“It is a national security risk, not just an industrial concern,” Gupta cautions. “India cannot allow long-term dependence on another country for something so integral to mobility, defence, and energy infrastructure.”
US and EU Push Back; India Steps In With Its Own Strategy
In the last year, both the US and European Union have announced aggressive programs to counter rare-earth supply risks. These include:
- Restarting local mining
- Building magnet manufacturing plants
- Subsidising recycling infrastructure
India has responded with its own moves:
Major Indian Government Initiatives
- Billion-dollar subsidies for magnet manufacturing under the Ministry of Heavy Industries
- The National Critical Mineral Mission, with an outlay of ₹34,300 crore to strengthen critical mineral supply chains
- Support for building domestic processing and refining capacity
Gupta explains that these subsidies help new magnet plants compete with low-cost Chinese imports by providing capex incentives and guaranteed support prices.
India’s Capacity Gap Is Still Significant
India’s demand for high-grade rare-earth magnets stands at 6,000 tonnes per year.
But IREL (India) — formerly Indian Rare Earths — currently produces less than 500 tonnes per year of usable materials for magnet applications.
IREL’s Odisha facility is capable of producing 11,000 tonnes of rare-earth concentrate, but only a small portion becomes high-purity magnet-grade material.
The gap is massive — and widening as EV demand accelerates.
Recycling: A Crucial Piece of India’s EV Component Strategy
According to Gupta, recycling is India’s most immediate opportunity to reduce Chinese dependence.
“Attero will be able to meet 75% of India’s rare-earth demand within 24 months,” he claims. The company has four patents covering rare-earth extraction and refining technologies, with capabilities already validated for magnet applications.
Platforms such as:
- MetalMandi (aggregators)
- Selsmart (direct customers)
…ensure steady access to high-quality e-waste and help scale India’s urban mining ecosystem.
Are Recycled Rare Earths Enough? Not Yet, Say Innovators
Keshavachar acknowledges recycling’s importance but remains unconvinced about its current scalability.
“The chemistry is complex, the processes aren’t mature, and the economics don’t support high-volume rare-earth recovery yet,” he says. Globally, there is also not enough end-of-life magnet material available to build a stable recycled supply chain.
For him, magnet-free motor technologies offer a more sustainable long-term solution.
One Sector, Two Paths — And India Needs Both
Despite their contrasting perspectives, both Gupta and Keshavachar agree that India cannot rely on a single pathway.
Gupta summarises the strategy succinctly:
India needs a three-pillar solution:
- Build domestic rare-earth magnet manufacturing capacity
- Scale rare-earth recycling at industrial levels
- Simultaneously develop rare-earth-free motor technologies
This multi-pronged approach is essential if India hopes to insulate its EV sector from global supply shocks, price volatility, and strategic vulnerabilities.
The Road Ahead
The global race to secure magnet supply chains has begun, and India is at a critical inflection point. Whether through innovation in magnet-free EV motors, scaling domestic magnet production, or accelerating recycling, the country must move decisively.
EV adoption will rise, battery technology will evolve, and charging infrastructure will expand — but all of this depends on one unseen component at the heart of every electric drivetrain.
Magnets may be small, but their impact on India’s EV future is monumental.
Comment by Author
India’s magnet dilemma captures a deeper truth about the country’s EV journey — technological independence cannot rely on a single solution. Rare-earth-free motors promise resilience and cost stability, while domestic magnet production and large-scale recycling remain critical to safeguarding national security and supply-chain continuity. As global competition intensifies, India’s next moves must be swift, coordinated and innovation-driven. The future of India’s EV ecosystem will be shaped not just by how fast the country electrifies, but by how strategically it secures the invisible components powering that transition.
