Amid the growing uncertainties regarding the supply of rare earth magnets from China, the government has been planning to Appoint a team of automotive industry leaders to visit China and discuss the restoration of essential magnet supply at the earliest. Once the team has been formed, it will soon visit China in the upcoming 2-3 weeks.
Electric vehicle manufacturing is highly dependent on Rare Earth Magnets; they are an integral part of overall production of new EVs. The need for such delegation led discussions rose up when China in April implemented stricter rules on exporting Rare Earth Magnets requiring import permits. Currently, China has a hegemonic control over the processes of 90% of the overall supply of these magnets globally. These changes were initially considered to be a response to tariffs imposed by the US, but the impact of such a change has had rippling effects all across the globe where EV manufacturing is dominant.
New Regulations By China
New Regulations that have been levied by the Chinese Authorities require exporters to secure key government licenses and comprehensive end use certificates from buyers prior to the shipment. China presents the changes as procedural updates, but these have significantly slowed down the clearance process. As per an Autocar Professional report more than 30 applications have been filed by the Indian Auto Industry, but no clearances have yet been received.
With the EV manufacturing sector being the new chapter in the genesis of auto car manufacturing in India, such limitations have led the industry to an upcoming unmitigated halt. OEM manufacturers have reported to the government that stricter rules could lead the production to a halt soon.. The Existing piles of the critical minerals necessary for production might only last for a few days.
Although rare metal deposits do exist in India and other parts of the world, extracting them and refining them require a significant investment and expertise, and finding a veritable substitute to these metals could pose an issue in the future as well.
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