Ather Energy is moving to light rare earth magnets amid supply chain crisis

Ather Energy is moving to light rare earth magnets amid supply chain crisis

Bengaluru-based electric scooter maker Ather Energy is reworking its motor strategy to reduce dependence on heavy rare earth magnets to insulate its supply chain from global shortages triggered by recent Chinese curbs, co-founder and CEO Tarun Mehta told Moneycontrol in an interaction.

“The most important thing we have gotten out of this entire phase is that we decided to use all our engineering resources in moving away from heavy rare earth tech to light rare earth tech,” Mehta told. “Ferrite is a stage lower, but heavy to light is a good transition that solves this crisis for us.”

India’s electric vehicle industry has been grappling with supply risks due to the concentrated global supply of heavy rare earths, which are critical for high-performance magnets used in EV motors. Companies like Ola Electric have also said they are working on rare-earth-free ferrite motors to hedge against disruptions.

In financial year 2024, India imported around 460 tonnes of rare-earth magnets, almost entirely from China, with likelihood of the figure rising to 700 tonnes in FY25.

Mehta's statements come in as Prime Minister Modi met Chinese President Xi Jinping  last week, at a time when India's automotive sector has been seeking further relaxation in Beijing's curbs on rare earths magnets, which have been in place since April, hampering EV makers' production plans.

More than 50 Indian applications to import heavy rare earth magnets are awaiting approval in China, Bloomberg News had reported citing people familiar with the matter.

Also Read: EV makers Ola, Ather’s shares soar on hopes of easier access to Chinese rare earth magnets, GST reform benefits

China has, however, started lifting the restrictions on rare earth metals and critical minerals exports amid signs of a thaw in trade relations with China. While an official statement is still awaited, PM Modi's visit to China has likely boosted hopes for relaxation in export curbs, which will likely benefit EV-makers like Ola Electric and Ather Energy.

Mehta said that while heavy rare earth supplies have resumed in the interim, Ather is focusing “razor sharp” on migrating to light rare earths, which are not under sanctions or export restrictions. “The performance trade-off is minimal, and it does not really impact two-wheeler EVs,” he added.

The shift underscores how Indian EV makers are trying to localise and de-risk their technology stack even as demand for premium electric scooters continues to surge.

Ather's rival, Ola Electric is also working to reduce dependence on heavy rare earth magnets.

Ola Electric's founder Bhavish Aggarwal added that while India must engage with China in the shorter term and diversify sourcing to other countries, the long-term strategy must be to “leapfrog rare earth into rare earth-free technology.”

Also Read: De-risking from rare earths with ferrite magnet motors, says Ola's Bhavish Aggarwal