Automakers gear up to roll out EVs without rare earth magnets by FY27

India's automobile majors are preparing for a future less dependent on rare earth magnets (REMs), in an effort to safeguard the country's burgeoning electric vehicle (EV) sector against global supply shocks.

- SOHINI DAS & SHINE JACOB

According to several industry insiders, nearly all leading passenger and commercial vehicle manufacturers are now working towards launching vehicles powered by REM-free motors by 2026-27 (FY27).

While companies remain tight-lipped about the shift, most acknowledge that the transition is essential to match the pace of the sector's growth. For years now, original equipment manufacturers (OEMs) and component vendors have been developing technologies aimed at bypassing the need for REMs — an effort that picked up pace in the wake of China's Ministry of Commerce imposing export restrictions on several rare earth elements.

The move was widely interpreted as a retaliatory measure following tariffs imposed on Chinese goods by US President Donald Trump. The resulting disruption led to panic across global automotive supply chains. On Wednesday, however, Trump announced the US would get magnets and REMs from China under a new trade deal and that tariffs on Chinese goods would be 55 per cent.

Speaking with Business Standard, Jaideep Wadhwa, director, Sterling Tools, revealed that his firm had been collaborating with multiple OEMs over the past four-five years over REM-free motor applications.

The company signed a technology licensing agreement on May 14 with the UK-based Advanced Electric Machines (AEM), after years of discussion.