The electric two-wheeler sector is expected to be impacted most and immediately by the delay in the supply of the rare earth magnets from China.
Two-wheeler manufacturers have called out for a halt in production supply from July if the shipment of rare earth magnets is delayed further due to China’s export curbs on rare earth magnets.
The estimated annual demand of rare earth magnets in the electric vehicle industry in India is 6,000 to 7,500 tonnes, with complete export dependence from China. Experts state that, on average, an electric two-wheeler requires 689.6 tonnes of magnets while a passenger vehicle requires 231.6 tonnes.
Further, unlike four-wheeler Original Equipment Manufacturers (OEMs), electric two-wheeler manufacturers lack diversified supply chains and long-term contracts for the procurement of raw materials.
“To address the immediate crisis, India must engage diplomatically with China to clear held-up shipments and simultaneously explore temporary sourcing alternatives from countries like Japan and Vietnam. In the medium term, the focus should shift to accelerating domestic mining, R&D efforts and technology transfers, scaling up recycling of end-of-life motors to recover critical materials,” Nikhil Dhaka, Vice President, Primus Partners, told businessline.
Smaller electric two-wheeler makers and startups hold limited stocks of upto 6 to 8 weeks, with even large firms having short buffers.
“Rare earth magnets are not just critical to electric vehicles—they’re embedded across our daily lives, from ceiling fans and smartphone speakers to laptops and industrial appliances. The issue of rare earth supply constraints is far broader than just EVs, exposing how deep and wide our dependency is. In India’s two-wheeler EV sector, the challenge is particularly acute—we import over 90 per cent of our rare earth materials from China, creating a serious vulnerability in our supply chain,” Sravan Kumar Appana, CEO of iGowise Mobility, told businessline.
Bajaj Auto stated that while its electric vehicle business will be at risk, new launches will have to be postponed, and production lines will be impacted from July if there are further delays in shipment.
“80 per cent of the products required for manufacturing electric vehicles come from China. 30 applications for procuring rare earth magnets have been made from the auto industry, which are at various stages of approval. However, there has been no relief, and if this continues, then production lines in July will be severely impacted,” Rakesh Sharma, Executive Director of Bajaj Auto, told the media.
Meanwhile, electric carmakers have pointed out that no immediate impact on production is expected due to the delay in rare earth magnets.
“We do not see any immediate impact or a crisis in production as we have inventories available with us,” said Shailesh Chandra, Managing Director, Tata Passenger Electric Mobility, and Tata Motors Passenger Vehicles.
“It is not a restriction. It is an endorsement of end use. In case there is an issue, we will … inform all our stakeholders, including the stock exchange,” said Rahul Bharti, senior executive director for corporate affairs of Maruti Suzuki, reported Reuters.
Published on June 4, 2025
The electric two-wheeler sector is expected to be impacted most and immediately by the delay in the supply of the rare earth magnets from China.
Two-wheeler manufacturers have called out for a halt in production supply from July if the shipment of rare earth magnets is delayed further due to China’s export curbs on rare earth magnets.
The estimated annual demand of rare earth magnets in the electric vehicle industry in India is 6,000 to 7,500 tonnes, with complete export dependence from China. Experts state that, on average, an electric two-wheeler requires 689.6 tonnes of magnets while a passenger vehicle requires 231.6 tonnes.
Further, unlike four-wheeler Original Equipment Manufacturers (OEMs), electric two-wheeler manufacturers lack diversified supply chains and long-term contracts for the procurement of raw materials.
“To address the immediate crisis, India must engage diplomatically with China to clear held-up shipments and simultaneously explore temporary sourcing alternatives from countries like Japan and Vietnam. In the medium term, the focus should shift to accelerating domestic mining, R&D efforts and technology transfers, scaling up recycling of end-of-life motors to recover critical materials,” Nikhil Dhaka, Vice President, Primus Partners, told businessline.
Smaller electric two-wheeler makers and startups hold limited stocks of upto 6 to 8 weeks, with even large firms having short buffers.
“Rare earth magnets are not just critical to electric vehicles—they’re embedded across our daily lives, from ceiling fans and smartphone speakers to laptops and industrial appliances. The issue of rare earth supply constraints is far broader than just EVs, exposing how deep and wide our dependency is. In India’s two-wheeler EV sector, the challenge is particularly acute—we import over 90 per cent of our rare earth materials from China, creating a serious vulnerability in our supply chain,” Sravan Kumar Appana, CEO of iGowise Mobility, told businessline.
Bajaj Auto stated that while its electric vehicle business will be at risk, new launches will have to be postponed, and production lines will be impacted from July if there are further delays in shipment.
“80 per cent of the products required for manufacturing electric vehicles come from China. 30 applications for procuring rare earth magnets have been made from the auto industry, which are at various stages of approval. However, there has been no relief, and if this continues, then production lines in July will be severely impacted,” Rakesh Sharma, Executive Director of Bajaj Auto, told the media.
Meanwhile, electric carmakers have pointed out that no immediate impact on production is expected due to the delay in rare earth magnets.
“We do not see any immediate impact or a crisis in production as we have inventories available with us,” said Shailesh Chandra, Managing Director, Tata Passenger Electric Mobility, and Tata Motors Passenger Vehicles.
“It is not a restriction. It is an endorsement of end use. In case there is an issue, we will … inform all our stakeholders, including the stock exchange,” said Rahul Bharti, senior executive director for corporate affairs of Maruti Suzuki, reported Reuters.
Published on June 4, 2025
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