In the face of Chinese export controls on rare earth minerals, Autocar Professional looks at three startups that are working on alternative technologies that can reduce the EV industry’s dependence on China.
19 Jun 2025 | 6213 Views | By Shahkar Abidi
As China tightens its grip on rare earth exports, India's automotive industry—long reliant on the flow of high-performance materials from its northern neighbor—is making a hard pivot. A host of startups are rushing to develop magnet-free electric motor technologies or engineered substitutes to stave off supply shocks. The moves come ...
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As China tightens its grip on rare earth exports, India's automotive industry—long reliant on the flow of high-performance materials from its northern neighbor—is making a hard pivot. A host of startups are rushing to develop magnet-free electric motor technologies or engineered substitutes to stave off supply shocks. The moves come at a juncture when India’s electric vehicle (EV) sector is poised for exponential growth and rare earth magnet inventories potentially drying up by mid-July.
Experts suggest that inventories of Indian auto companies for certain automotive applications that are dependent on rare earth supplies might be depleted by mid-July. According to ICRA, Indian automakers are weighing several stopgap options: importing fully assembled motors from China; shipping rotors to China for magnet assembly and re-importing them; replacing rare earths with engineered alternatives; or adopting electromagnet-based motors. Each solution, however, comes with logistical and regulatory complexities and may require condensed development cycles to minimize disruption.
Jitin Makkar, Senior Vice President and Group Head – Corporate Ratings at ICRA Limited, compared the current rare earth crunch to the 2021–22 semiconductor shortage, which shaved 100,000 units—or about 4%—from passenger vehicle output. “With China tightening export controls and delaying shipment clearances, rare earth magnet inventories are projected to last only until mid-July 2025 for several, if not all, passenger vehicle and two-wheeler applications,” Makkar said.
The rare-earth magnets in question—neodymium-iron-boron (NdFeB)—are crucial for traction motors in EVs and for power steering in both EVs and ICE vehicles. More conventional ferrite magnets are typically used in lower-performance applications like window regulators and wipers, ICRA noted. Makkar estimated rare earth magnets comprise about 30% of motor unit costs in electric two-wheelers, with motors priced between Rs 8,000 and Rs 15,000 depending on specs. In FY2025, India imported about $200 million worth of rare earth magnets, 85% of which came from China.
We look at three startups that are working on developing and deploying substitute materials engineered to mimic the magnetic properties of rare earth magnets or designing motors that eliminate rare earth magnets altogether, opting instead for configurations driven by electromagnets or other inductive technologies.
Conifer.io
For instance, Conifer.io, a California-headquartered startup with a plant in Pune, is working on ferrite magnets. For the uninitiated, ferrite magnets—also known as ceramic magnets—were among the first commercially produced magnets, appearing approximately 100 years ago and are about 85% composed of rust (ferrous oxide). A key characteristic of ferrite magnets is that their supply chain is globally distributed, allowing them to be produced in various countries such as India, Germany, and the United States. This contrasts with rare earth magnets, which have a supply chain heavily controlled by China.
Ankit Somani, the co-founder of Conifer.io, noted that ferrite magnets possess only one-third the magnetic flux of rare earth magnets. This means that existing motor technologies, such as those from companies like Bosch or Nidec, cannot simply substitute rare earth magnets with ferrite magnets without a significant decline in performance. Conifer.io’s innovation lies in increasing the magnetic flux from their motor's stator to a much higher level, which enables them to use these weaker, more widely available ferrite magnets while still achieving or even surpassing the performance of rare earth-based motors.
Specifically, their system offers a 10–15% increase in power density and up to 30% increase in range due to greater efficiency. It also provides two to three times longer peak torque, which is vital for acceleration and enhances the rider's experience. Ferrite magnets are significantly cheaper, about 1/15th to 1/20th the cost of rare earth-based magnets.
Furthermore, Somani pointed out that even electric motor manufacturing machines are often imported from China, and China is now blocking their sale, creating a parallel challenge to material supply. Conifer.io aims for a modular manufacturing process, enabling various motor types to be produced on the same line—vital for a startup to avoid high capital expenditure.
“ICE engines are made with the simplest materials and simplest processes and can be made anywhere in the world,” Somani said. “So if you have to make an EV engine, you cannot be so dependent on one specific kind of material that has shown up from one place. So we made it part of our raison d'être that we are going to use the simplest, locally sourced materials possible and the same thing from a process standpoint.” Somani added that Conifer.io's product is designed as a drop-in replacement for OEMs. For example, a two-wheeler manufacturer using a hub motor can simply swap their existing wheel for Conifer.io's without needing to make system changes, thereby lowering integration risk. This contrasts with other magnet-free solutions that might require significant redesign.
Conifer.ion raised $20 million in seed funding. Looking ahead, Conifer.ion plans to raise at least one large equity round, estimated to be between $25 million and $50 million, to support its next phase of growth and achieve a manufacturing capacity of a million units per year within three years. Conifer.ion's current manufacturing plant in Pune has a capacity of 70,000 units per year.
This is their first plant, and it is expected to reach full capacity by Q1 2026 (calendar year). Production-level units are anticipated to be supplied starting in Q3 of the current year. The company plans to invest in another manufacturing line by mid-2026 to further scale up production.
Chara Technologies
Likewise, Chara Technologies, another startup, is developing a distinct type of electric motor known as Synchronous Reluctance Motors, or SynRMs, which are designed to operate entirely without rare earth magnets. In layman’s terms, both SynRMs and PMSMs are “synchronous” motors, meaning the spinning rotor moves in sync with the magnetic field. But they differ in construction.
PMSMs rely on strong rare earth magnets like neodymium and samarium placed inside the rotor, while SynRMs use air gaps and metallic components to create magnetic reluctance. This allows the rotor to follow the path of least magnetic resistance, achieving motion without permanent magnets.
While acknowledging that SynRMs tend to be 10–15% heavier than traditional motors, Bhaktha Keshavachar, co-founder of Chara Technologies, asserted that the trade-off appears worthwhile. Chara’s 5.7-kilowatt SynRMs deliver 94% peak efficiency and 92% duty cycle efficiency—compared to 94% peak and 87% operational efficiency in a 5.2-kilowatt PMSM—yielding a longer range of 147 kilometers, versus 138.5 kilometers. Keshavachar emphasized the environmental advantage of avoiding rare earths, which are linked to radioactive waste from mining.
In 2020, the company received a grant from the Indian Institute of Science. This was followed by a $1 million seed investment in 2021 from Kalaari Capital and IIMA Ventures. Most recently, in January 2023, Chara Technologies raised a $5 million round led by Exfinity Venture Partners. Currently Chara boasts over 50 clients. Looking ahead to FY26, the company aims to deploy 15,000 motors.
Shakti Pumps
Similarly, Shakti Pumps, a BSE-listed manufacturer known for energy-efficient motors, is believed to be branching into EV mobility with high-efficiency induction motors that are also magnet-free. These motors are being tailored for dynamic driving conditions and promise greater durability due to fewer components susceptible to degradation.
In FY2026, India’s passenger vehicle market is forecast to grow 2–4%, with electric passenger vehicles growing 35–40% off a low base. Electric two-wheelers are expected to grow 27%, outpacing overall two-wheeler growth of 8–10%. However, sustained material shortages could temper these gains. “A broader impact on two-wheelers and ICE passenger vehicles may follow if the supply bottlenecks persist for an extended period,” Sethi said.