Ola Electric held its much-anticipated Sankalp 2025 event on Independence Day at its gigafactory in Krishnagiri, Tamil Nadu, and announced a new ferrite motor that eliminates the need for rare-earth magnets, with plans for phased deployment starting in Q3 FY26.
Rare earths are a group of 17 minerals pivotal to manufacturing automobiles, consumer electronics, and defence equipment.
Why this matters
This step is aimed at enhancing sustainability and independence from global supply constraints. Electric vehicle (EV) makers are scrambling as China is reining in exports of rare earth magnets used in EVs. The country dominates over 70% of global rare earth production and 90% of refining.
"The main message today for you all is that the world is in a complex geopolitical space, like imposing 50% tariffs...We want to build the best in India, and that's the spirit of Ola Electric," founder and CEO Bhavish Aggarwal said at the event, addressing employees who were present in large numbers. India needs to leapfrog to the next generation, as these rare earth magnets are coming from "very few nations," he noted.
Due to China hogging the rare earth supply, automakers have seen significant delays, shortages, and production halts, highlighting the issue of overdependence on a single supplier country.
Early plans
In a letter to shareholders after its June quarter results, the electric two-wheeler maker said it had started working on motors without rare earth magnets a couple of years ago. It fast-tracked the project in April after Beijing restricted exports in response to tariffs imposed by the US.
China exported 7,742.2 metric tonnes in June, up from 5,864.6 metric tonnes in May, data from the General Administration of Customs showed. This data does not segregate different kinds of rare earths and related products, some of which are not covered by the controls.
Disruption
Ola Electric told shareholders it has a "reasonable inventory" of rare earth magnets, which it has been sourcing from two countries to keep options open. The company said that since it is not reliant on intermediary motor suppliers, it has been able to switch and ramp up other sources of rare earth magnets quickly.
This was after Tarun Mehta, cofounder and CEO of Ather, had said the company could face a shortfall of up to seven days' supply during the quarter due to China's curbs, which may affect its ability to meet dealer demand.
Mehta noted during the first quarter earnings call that the company’s retail operations will also be affected, particularly as channel inventory remains lean.
In a world where the EV market is exploding, the global demand for rare earth materials such as neodymium and dysprosium is set to increase by over 70% by 2030.
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Why this matters
This step is aimed at enhancing sustainability and independence from global supply constraints. Electric vehicle (EV) makers are scrambling as China is reining in exports of rare earth magnets used in EVs. The country dominates over 70% of global rare earth production and 90% of refining.
"The main message today for you all is that the world is in a complex geopolitical space, like imposing 50% tariffs...We want to build the best in India, and that's the spirit of Ola Electric," founder and CEO Bhavish Aggarwal said at the event, addressing employees who were present in large numbers. India needs to leapfrog to the next generation, as these rare earth magnets are coming from "very few nations," he noted.
Due to China hogging the rare earth supply, automakers have seen significant delays, shortages, and production halts, highlighting the issue of overdependence on a single supplier country.
Early plans
In a letter to shareholders after its June quarter results, the electric two-wheeler maker said it had started working on motors without rare earth magnets a couple of years ago. It fast-tracked the project in April after Beijing restricted exports in response to tariffs imposed by the US.
China exported 7,742.2 metric tonnes in June, up from 5,864.6 metric tonnes in May, data from the General Administration of Customs showed. This data does not segregate different kinds of rare earths and related products, some of which are not covered by the controls.
Disruption
Ola Electric told shareholders it has a "reasonable inventory" of rare earth magnets, which it has been sourcing from two countries to keep options open. The company said that since it is not reliant on intermediary motor suppliers, it has been able to switch and ramp up other sources of rare earth magnets quickly.
This was after Tarun Mehta, cofounder and CEO of Ather, had said the company could face a shortfall of up to seven days' supply during the quarter due to China's curbs, which may affect its ability to meet dealer demand.
Mehta noted during the first quarter earnings call that the company’s retail operations will also be affected, particularly as channel inventory remains lean.
In a world where the EV market is exploding, the global demand for rare earth materials such as neodymium and dysprosium is set to increase by over 70% by 2030.
