Rare earth magnet crisis: Have inventory for affected parts to meet production needs, says Mahindra

The XEV 9e is Mahindra's flagship electric SUV.

Amid the ongoing rare earth magnet crisis, homegrown auto major Mahindra & Mahindra said that it has inventory for affected parts to meet the production needs of its sport utility vehicles (SUVs).

The country's largest SUV maker offers internal combustion engine (ICE) models like the Bolero, Bolero Neo, XUV 3XO, Thar, Thar Roxx, Scorpio Classic, Scorpio-N and XUV700. Its electric vehicle (EV) portfolio includes the XUV400, BE 6 and XEV 9e.

The usage of rare earth magnets is maximum in components of EVs and hybrids. ICE models require relatively less components having rare earth magnets.

Rare earth magnets are used in manufacturing of permanent magnet synchronous motors (PMSMs), which are employed by EVs. Even hybrid models depend on them for efficient propulsion. In ICE cars, their use is mostly limited to electric power steering and other motorised systems, according to Crisil Ratings.

Among the most commonly used rare earth magnets are Neodymium-Iron-Boron (NdFeB) and Samarium-Cobalt (SmCo).

At 118,096 units, EVs accounted for 2.7% of the total passenger vehicle (PV) wholesales in India in FY25. On the other hand, hybrids had a share of 2.4% at 104,800 units during the fiscal.

"The Government of the People's Republic of China has introduced new export controls on rare earth materials, requiring end-use certification to ensure non-military use. Rare earth magnets, used in key automotive components, are impacted only when imported as raw materials - not as part of assembled parts," a Mahindra spokesperson said in an official statement.

"Currently Mahindra has inventory for affected parts to meet the production needs," the spokesperson noted.

We are actively de-risking our supply chain by sourcing assembled parts, exploring alternate materials, and working with Society of Indian Automobile Manufacturers (SIAM) and the Government of India to expedite certifications, the spokesperson said, adding that the company is closely collaborating with its suppliers to ensure there is no disruption in production.

Mahindra was the fourth largest carmaker in India in FY25 at 5,51,487 units. However, it is ahead of Hyundai and Tata in FY26 (April-May) at 104,761 units owing to a robust demand for its SUVs.