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

Bhavish Aggarwal at Sankalp

Electric two-wheeler player Ola Electric is reducing its dependence on rare earth magnets by developing an in-house ferrite motor technology to insulate its supply chain from global shortages triggered by recent Chinese curbs.

“China has almost a monopoly on rare earths. Rare earth is like the current technology of motors… The direction is to reduce rare earths to the magnet itself, and eventually to electromagnets. We started the journey about two years back with our ferrite magnet motor, and we are ready for production. From next quarter onwards, we will bring this into our products. That will help us de-risk from the rare earth supply chain,” Bhavish Aggarwal, founder and chairman of Ola Electric said during an interview with Moneycontrol at the company's newly opened Gigafactory, where it plans to manufacture lithium-ion cells to power electric vehicles.

Read the Full Interview Here

The push comes at a time when some EV rivals have warned of their production coming to a halt without access to Chinese rare earth magnets.

India's electric vehicle and clean-tech ambitions have recently got entangled with China’s near-total control over the rare-earth magnets, critical for high-torque motors. 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.

China controls 90 percent of the global supply chain for permanent rare-earth magnets and over 60 percent of global rare-earth reserves, giving it unmatched leverage globally.

Also Read: How China’s grip on rare earth magnets hurts Indian manufacturing — and the way out

Amid rising trade tensions and Beijing’s restrictions on exports of critical minerals, Indian manufacturers - from EV makers to electronics firms - have warned of potential production shortfalls within weeks if supply disruptions persist. As per a recent report, each EV uses between 1-2 kg of these magnets and its domestic market is projected to be worth Rs 7,295 crore by 2030.

Speaking on the sidelines of Ola Electric’s annual event Sankalp on August 15, Aggarwal said Ola Electric has not faced such risks because it manufactures motors in-house.

“All other OEMs, especially the ones saying production will stop, don’t make the motor themselves. We make the motor in-house, and hence, we have multiple sources of magnets already — multiple countries, dual sources of origin. So, we have de-risked ourselves in the short term,” he said.

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.”