Rare earth magnet crisis: Kinetic Green CEO advocates for government support for Indian EV sector

The Indian auto industry, especially the electric vehicle segment, is yet to see a clear solution to the ongoing rare earth magnet production crisis. The stakeholders of the industry, as well as the Indian government, have been mulling a multi-pronged plan to tackle this situation, and one of them is the local production of rare earth magnets. However, this will be a time-consuming affair.

Sulajja Firodia Motwani, CEO of Kinetic Green, has said that local production of rare earth magnets will take time, and meanwhile, the government needs to support the Indian EV sector. She has called for government intervention in the rare-earth materials issue, stating that while the Indian electric vehicle sector has managed to cope in the short term, it will face significant challenges ahead, as it's not easy to change the product design and supply chain.

Speaking to news agency ANI, Motwani said that it could take at least two to three years for the players in the automobile sector to localise the supply chain or adopt alternative technologies. "It will impact the industry if it's not solved because it's not easy to change your product design and supply chain. The EV sector is scrambling somehow to manage for the short run. But I think there has to be a government-to-government solution very soon in the medium term. Because it will take two to three years to try to localise the supply chain or change the technology altogether. So I think it's important that this is resolved," she said, while further adding that the industry faced a similar situation in Covid crisis on semiconductors and the government did follow through and resolve it. "I'm hopeful that something will emerge from this," she said.

Motwani added that until the issue is solved, Kinetic Green is working on developing alternative technologies to mitigate the adverse impact of such restrictions arising from global geopolitical moves. "But in the meantime, we are finding alternatives so that the business can continue, but it's not ideal to do that, and also, maybe not everybody can. So it (restrictions on rare-earth material by China) will impact the sector," she added.

The Indian government has earmarked ₹1,345 crore to incentivise the production of rare earth magnets in India after China announced a decision to implement export controls on certain rare earth-related items, pushing a supply shortage across the world, including India, back in April this year. Meanwhile, India is in touch with the Chinese side, seeking predictability in the supply of rare earth metals.

China's overwhelming control of global rare earth processing - commanding over 90 per cent of the world's magnet production capacity - has created significant vulnerabilities for industries worldwide. These materials are critical across multiple sectors, including automobiles, home appliances, and clean energy systems. Beyond China, there are only a few alternative suppliers of critical minerals.

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