News, 9 July 2025
India is rethinking its electric vehicle (EV) policy, due to new restrictions from China on rare earth magnets and related materials. These restrictions, effective April 4th 2025, are impacting global automakers, including those in India.
This move by Beijing has spurred discussions within the Indian government about the geopolitical implications of its vehicular technology choice. There’s concern that an exclusive focus on BEVs might unduly benefit China while potentially harming India’s domestic internal combustion engine (ICE) automotive value chain and ancillary industries.
Rare Earth Magnets
Neodymium-iron-boron (NdFeB) rare earth magnets are essential for electric vehicle (EV) production, particularly for their electric motors. They create powerful magnetic fields essential for efficient traction motors in EVs and are crucial for permanent magnet synchronous motors widely used in these vehicles. These magnets also play a role in other vehicular components like power steering, wipers, and braking systems, affecting both EVs and ICE vehicles. China holds a near monopoly on these rare earth magnets.
While rare earth metals are found globally, China leads in their efficient processing, a position once held by the US and Japan. Japan has revived some of its mineral processing, but countries like the US and India remain heavily reliant on Chinese exports. China previously restricted exports of seven heavy rare earth metals and rare earth magnets in response to US tariffs, and these restrictions largely remain. Earlier, China also banned exports of gallium, germanium, antimony, and other high-tech materials to the US.
Finally, the source of electricity for EVs is a point of contention. In many countries with successful EV push, a significant portion of electricity comes from renewables. In India, despite efforts in renewable energy, the grid is still heavily reliant on coal-fired thermal plants. So, its like charging EVs with electricity from coal!
