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India races to cut reliance on Chinese rare earth magnets

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China resumes some rare earth exports to US, Europe, not

India

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Part maker Sterling fast-tracks magnet-free motor

production

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India's Sona Comstar has plans to make magnets

domestically

By Aditi Shah

FARIDABAD, India, Sept 9 (Reuters) - In a 3,500 square

foot laboratory in Faridabad, northern India, engineers are

fast-tracking tests on an EV motor that could help alleviate one

of New Delhi's most pressing trade and diplomatic challenges:

its reliance on China for rare earths.

Unlike regular EV motors, the one being tested by Sterling

Gtake E-Mobility does not use rare-earth magnets - a technology

that, while not new, is uncommon and could be transformative for

the world's No. 3 car market that has been hit harder than most

by China's export curbs on the critical minerals.

"We want to be in commercial production as soon as

possible," Sterling Managing Director Jaideep Wadhwa said.

Seven Indian automakers are reviewing the motors, and if

cleared, production could begin within a year, well ahead of an

initial 2029 target, he added. Sterling sped up the timeline

after China announced the curbs in April in response to U.S.

tariffs.

While China has since resumed some rare earth shipments to

the U.S. and Europe, India remains effectively cut off due to

political tensions with Beijing. Indian companies have yet to

see a single import application approved.

Prime Minister Narendra Modi and Chinese President Xi

Jinping have discussed ways to improve trade, and Beijing has

agreed to lift curbs on magnet exports but has not given a

timeline.

Against this backdrop, Sterling and several other firms are

expediting work on alternate technologies that eliminate magnets

or use ferrite or "light" rare earths, materials for which there

is no dependence on China.

China controls more than 90% of the world's rare-earths

processing capacity, giving it diplomatic clout and dominance

over the supply chain, as the global pivot to EVs intensifies

demand for the group of 17 elements vital to consumer

electronics, EV batteries, and motor magnets.

India has the world's fifth-largest rare earth reserves, but

lacks the ability to process them into magnets.

To address this, the government plans to offer incentives

for mining and processing, while also seeking to collaborate

with Japanese and South Korean companies to produce magnets.

CUT RARE EARTH DEPENDENCE

Car makers like BMW and Nissan ( NSANF ) are

already building EV motors that do not rely on rare earths.

However, the technology is yet to see widespread adoption as

matching the compact size, light weight and performance of

magnet-based motors remains a challenge. Rigorous testing

requirements have further deterred many automakers.

But that appears to be changing amid concerns about China

using rare earths as a political tool. In 2010, Beijing briefly

stopped shipments to Japan after a diplomatic dispute.

"This could happen again in five years" cautioned Vivek

Vikram Singh, CEO of Indian parts supplier Sona Comstar

, referring to China's export curbs.

While plans to mine and process rare earths would take years

to develop, Singh said India "should not stop working on it".

Sona, the largest importer of rare earth magnets in India's

auto sector, has plans to make magnets domestically and is also

developing motors without heavy rare earths from China.

In Faridabad, Sterling has hooked up one motor to the back

wheel of a stationary motorcycle in its lab and mounted another

on a dynamometer to measure torque and power output, while

various screens capture performance data.

These high-density reluctance motors use tightly wound metal

coils, instead of rare-earth magnets, to generate magnetic force

and power.

The technology belongs to Britain's Advanced Electric

Machines, which in June signed a licensing deal with Sterling,

enabling the Indian company to build the motors domestically.

James Widmer, CEO of Advanced Electric Machines, said

customers were pushing for quick solutions.

"What can you do now? That is what customers are asking."

'SCRAMBLING FOR LOCAL SOLUTIONS'

In Japan, scientist Masato Sagawa, who invented a magnet

using rare earth element neodymium in the 1980s, is advocating

for rare-earth free alternatives, saying they would be cheaper.

In India, start-up Chara Technologies has spent five years

refining its magnet-free motor technology to match and exceed

the performance of existing motors, CEO Bhaktha Keshavachar

said.

While its motors are about 10%-15% heavier, the company is

seeing demand from customers in India and Europe, he said.

Chara, which has built motors for two and three-wheelers,

will soon start production for small cars under a metric tonne.

U.S.-based Conifer is returning to long-used ferrite magnets

in motors which Indian founder Ankit Somani says can deliver

10%-30% better range than incumbent designs with some

innovation, and are much cheaper.

The company's Pune factory in western India is producing

hundreds of motors and will hit its annual capacity of 70,000

units within two quarters, Somani said.

"Everybody's scrambling for local solutions," he added.