Chara Technologies raises Rs 52 crore to expand rare-earth-free motor manufacturing

Focus on rare-earth-free architecture

Chara Technologies was founded in 2019 by Bhaktha Keshavachar, Mahalingam Koushik, and Ravi Prasad to build electric powertrain systems that are not dependent on rare-earth magnets. These magnets, which make up about 40% of a motor’s cost, are largely sourced from China, creating both price volatility and supply chain dependence for manufacturers.

“Rare-earths are one of the most fragile links in the EV supply chain,” said Keshavachar. “We have built a motor architecture that removes this dependence and can still match performance benchmarks in terms of torque and efficiency.”

The company uses a synchronous reluctance architecture, which eliminates the need for magnets entirely. This design, according to Chara, can reduce costs by 15–20% while maintaining comparable performance to traditional permanent magnet synchronous motors (PMSMs).

Chara’s control systems, algorithms, and power electronics are developed in-house, and its products are designed, engineered, and manufactured entirely in India.

Market and customers

The company’s products currently cater to two-wheelers, three-wheelers, four-wheelers, and off-highway vehicles, including agricultural and industrial equipment. Chara says it has close to 100 customers, including Greaves Cotton, BullWork, Sonalika, VST, and several European OEMs.

Chara has also entered into a manufacturing partnership with Greaves Cotton, under which the companies will jointly produce synchronous reluctance motors and controllers at Greaves’ facility in Aurangabad. The arrangement is intended to address supply chain constraints and localize production for EV OEMs.

Keshavachar said the company is now targeting a sixfold growth in revenue between FY25 and FY26, and expects to sell around 40,000 motors by FY27. “The new facility will help us meet growing demand from Indian OEMs and international customers,” he said.

Global and environmental context

Chara’s focus on magnet-free motors aligns with a growing industry push to diversify away from rare-earth materials, amid rising geopolitical and environmental concerns. China currently accounts for over 80% of the world’s rare-earth supply, and recent export restrictions have renewed attention on alternatives.

However, the company’s founders said the appeal of rare-earth-free designs extends beyond geopolitics.

“The extraction of rare-earth materials causes significant environmental damage,” said Mahalingam Koushik, Co-founder and CTO. “There is an increasing shift among OEMs, especially in Europe, to source motors that are more sustainable across their lifecycle.”

The company has filed for nine patents (one granted) and received approvals from India’s ARAI and ICAT agencies, which test and certify automotive components. Its products are currently being deployed across multiple vehicle platforms and industrial applications.

Revenue model and next phase

Chara follows a B2B model, supplying motors and controllers directly to OEMs and component manufacturers. It earns revenue through the sale of its hardware systems, with plans to expand into licensing its motor control software in select cases.

In addition to its India operations, Chara has a presence in Belgium and Italy, which will serve as bases for further expansion in Europe and North America.

The company employs around 100 people, including 75 engineers, across functions such as design, controls, and power electronics. It has appointed Nagesh Basavanahalli, an automotive industry veteran and former CEO of Greaves Cotton, as an independent board member to support its next stage of growth.

Investor outlook

Investors said Chara represents an early example of a domestic deep-tech hardware company addressing supply chain dependencies in EV manufacturing.

"Chara is the first Indian company that allows for end-to-end domestic sufficiency to enable the massive mission of EV adoption in India. They have achieved the most important milestone of a deeptech company, commercialising production and proving on-road performance of an IP-rich product starting from in-house design. The fresh capital will allow Chara to deliver on the quality and reliable production requirements of large OEMs,” said Rahul Chandra, Managing Director at Arkam Ventures.

Chinnu Senthil Kumar, Managing Partner at Exfinity Venture Partners, said the firm’s early investment in Chara was driven by its view on India’s potential to develop alternatives to rare-earth-based systems. “We anticipated the impact of trade restrictions on rare-earth materials a few years ago,” he said. “Chara’s technology fits into that global shift while leveraging India’s engineering capabilities.”

Outlook

Chara’s immediate focus is to complete its Bengaluru factory and expand production. The company aims to strengthen its software stack and efficiency algorithms to make its motors suitable for a wider range of vehicles and industrial uses.

“The next phase for us is about scaling production and proving reliability at larger volumes,” said Keshavachar.

As India accelerates its transition to electric mobility, companies like Chara are positioning themselves to supply key components domestically, reducing exposure to global supply risks while developing technologies suited to local cost and performance requirements.