Automakers' Strategies for Rare Earth Magnet Supply
The Indian auto industry has proposed a three-pronged approach to enhance the supply of rare earth magnets over the next three years, aiming to reduce dependence on China.
Immediate Strategies (Next 3 Years)
- Incentives for Indian companies to initiate local assembly of rare earth magnets.
- Promoting the recycling of used magnets to bolster supply.
- Outreach to resource-rich countries such as Australia, Vietnam, Chile, and Peru to secure additional supplies.
Long-term Strategies (3-10 Years Phase)
Over a longer period, the industry proposes the introduction of incentives:
- Encouraging large industrial players to set up manufacturing units for rare earth magnets.
- Establishing backward integration for raw materials to ensure a steady supply chain.
Current Challenges
- Auto parts manufacturers are expected to run out of stock of rare earth magnets by early next month.
- This shortage is anticipated to impact the production of critical components for electric vehicle motors, vehicle speed detection, and automatic gear shifting systems.
Global Context
China implemented export controls on medium and heavy rare earth-related items on April 4, citing national security concerns, which is a response to US tariffs.
Industry Goals
The ultimate objective is to develop both downstream capabilities and upstream processing infrastructure within India.
