Ola, Hyundai and Ather were the biggest winners among OEMs, while key component makers like Motherson, Sona Comstar, and battery makers Exide and Amara Raja also gained.
19 Aug 2025 | 1933 Views | By Kiran Murali
The positive momentum in the auto sector continued for a second day on Tuesday after strong gains on Monday. While Monday’s gains were on the back of expectations of a potential cut in GST rates, Tuesday’s rally was fueled by reports that China has agreed to resume the supply of ...
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The positive momentum in the auto sector continued for a second day on Tuesday after strong gains on Monday. While Monday’s gains were on the back of expectations of a potential cut in GST rates, Tuesday’s rally was fueled by reports that China has agreed to resume the supply of rare earth magnets to India.
The Nifty EV & New Age Automotive index, which tracks the performance of companies that are part of the electric vehicle ecosystem, or involved in developing new-age automotive vehicles, gained 1.8% while the broader Nifty Auto index gained 1.3%. Ola Electric was the top performer among a list of gainers that included Hyundai India, auto component maker Motherson Sumi, Tata Motors and battery makers Exide and Amara Raja.
Among OEMs, Ola led the rally with 8% gain. It was followed by Hyundai India (6.9%), Ather Energy (5%), Rattanindia Enterprises (which owns the Revolt brand) (4.2%), Olectra (3.7%), Tata Motors (3.6%), Hero MotoCorp (2.7%) and Bajaj Auto (2.1%). Among component makers, Motherson Sumi Wirings gained 6.4%, followed by Samvardhana Motherson (5.9%), Exide (4.7%), ZF Commercial Vehicle (3.8%), Amara Raja (3.5%) and Sona Comstar (2.5%).
On Tuesday morning, the Economic Times reported that China has lifted curbs on the export of rare earth magnets/minerals. During a two-day visit to India, Chinese Foreign Minister Wang Yi reportedly told External Affairs Minister S Jaishankar, that China has begun responding to India's requests for magnet supplies. Shipments have already started, the report said, citing sources.
Heavy rare-earth magnets play a critical role in the automotive industry. These magnets are important, particularly for EVs, due to their higher performance in small form factors, enhanced energy efficiency and critical functionality in both powertrains and digital systems.
China produces 60% of the world’s rare earth elements and controls around 90% of the global refining capacity. At nearly 2,850 tonnes, India was estimated to be the fifth-largest importer of rare earth permanent magnets and magnet alloys from China last year. In April, China implemented stricter rules on exporting rare-earth elements and related magnets, requiring import permits.
These changes were initially seen as a response to tariffs imposed by the U.S., but the impact is now rippling across global automotive supply chains and other industries. The import approvals from China became difficult and complex. They mandate an end-use declaration confirming the magnets will not be used for military purposes, along with certifications from multiple Indian ministries, the Chinese embassy, and final export clearance from Chinese authorities, creating significant logistical hurdles for importers.
The supply shortage of magnets is threatening to hit vehicle production. Automakers such as Bajaj Auto and Ather Energy have been particularly affected. Bajaj Auto was forced to cut its electric two-wheeler production by almost half in July and expects similar reductions through September. Ather Energy, on the other hand, anticipates an impact of up to a seven-day supply to its dealers during the July-September quarter.
To reduce their reliance on China, the government and companies are actively working on long-term solutions, such as incentivizing domestic magnet processing and developing motors that don't use rare-earth magnets. Despite these efforts, the quickest way to resolve the current supply issue was for China to resume its shipments.