German automotive supplier MAHLE is positioning India as a lead market for new technologies, with the country emerging as a candidate for the first launch of its AI-based cabin climate system. Management also sees strong potential for its rare-earth-free electric motor, but has not confirmed an India launch for either technology.
The shift marks a change from the past, when technologies were generally introduced in China, Europe or the US before being adapted for India.
“I normally say, if you want to put something on the road first, you have to go to China. But we have some examples where we actually put it on the road first in India, before Europe, before the US, before China,” Arnd Franz, Chairman of the Group Management Board and CEO of MAHLE, told Autocar Professional.
Roger Busch, MAHLE’s Head of Sales and Technology, said the company now has pilot applications that are being introduced for the first time globally in India.
The development reflects India’s growing role within MAHLE, from a market where global products were localised to one where systems are increasingly developed around local costs, climate and customer requirements.
MAHLE has 11 production locations, one technology centre and 4,622 employees in India. The country generated sales of €455 million in 2025 and was the supplier’s fastest-growing region. Revenue rose more than 10%, or over 20% after adjusting for currency movements. India’s share of group sales increased to 4% from 3% in 2024, according to MAHLE’s annual report.
Mahindra EV Programme Shows Changing Role
Management cited the thermal-management system supplied for Mahindra’s BE 6 and XEV 9e electric vehicles as an example of India’s growing role in product development.
Busch said MAHLE developed the complete system to deliver rapid cabin cooling while maintaining energy efficiency under demanding climatic conditions.
“The Mahindra battery-electric vehicles have the best pull-down curve,” Busch said. “Even if you operate in the northern desert region in India, the Mahindra cabin is by far the fastest to cool down with the highest efficiency. This overall system is from MAHLE.”
MAHLE said the Intelligent Thermal Management System was developed specifically for Mahindra’s first dedicated EV platform. It manages cabin and battery temperatures, along with airflow through the cooling module.
According to the supplier, the system cuts electric-compressor power consumption by 15-20% compared with reference vehicles without affecting cabin comfort. Components including the heating, ventilation and air-conditioning module, controller, cooling module and coolant pump are produced locally.
The programme also reflects a wider change in MAHLE’s relationship with Indian automakers. Busch said customers are increasingly asking it to take responsibility for complete systems rather than supply individual components against detailed specifications.
“In the past, we were more focused on components, and this is changing,” he said. “We are now increasingly becoming full-system suppliers to our OEMs.”
“The customers in India are also willing to give us responsibility for the overall system development,” Busch added.
This gives MAHLE greater involvement at the vehicle-development stage and allows products to be designed around local priorities such as high temperatures, energy use, cost and value for money.
India Could Get AI Cabin System First
MAHLE has identified India as a candidate to become the first launch market for its AI-controlled cabin climate system.
“AI makes the products more customer-centric,” Franz said. “We showed this with AI-based climate cabin comfort, something that India is a candidate for first to market with MAHLE.”
The company has not identified an Indian customer or disclosed when the technology could enter production.
MAHLE demonstrated an AI-controlled air-conditioning system at IAA Mobility 2025. The system learns the preferences of individual occupants and adjusts cabin temperature accordingly. It also combines personalised climate control with active air purification.
Rare-Earth-Free Motor a Priority
The new MCT electric motor from MAHLE for use on the electric drive axles of heavy trucks is not equipped with permanent magnets and therefore does not require any rare earth elements.
MAHLE also sees India as a potentially important market for its Contactless Transmitter, or MCT, electric motor. “This is the number one product for India,” Franz said.
“We believe, from a geopolitical and dependency standpoint, this is a must-have for India when it comes to electric vehicles,” he added. “Otherwise, somebody cuts the supply chain, and that could be the end of electrification in India.”
The company did not disclose an India launch timeline, localisation plans or the vehicle segments it would target first.
The MCT motor developed for heavy commercial-vehicle drive axles does not use permanent magnets and therefore avoids rare-earth elements, according to MAHLE. It can eliminate up to 3 kg of rare-earth magnets per vehicle compared with a benchmark permanent-magnet synchronous motor.
MAHLE claims the motor is 10% lighter and more efficient under real-world operating conditions than the benchmark motor. It delivers peak output of 370 kW and torque of more than 900 Nm at 3,900 rpm, with efficiency of around 95% in the European Union’s VECTO commercial-vehicle simulation cycle.
The system transfers electrical energy to the rotor without physical contact. Removing permanent magnets reduces exposure to rare-earth supply risks while allowing the motor to retain high efficiency across a wide operating range.
MAHLE supplies electric-drive systems and ancillary products for two- and three-wheelers, passenger cars and commercial vehicles. It sells about eight million electric drives and electric ancillary systems globally each year. More than 35 electrified passenger-vehicle and truck platforms using MAHLE technology are scheduled to launch between 2026 and 2029.
Rare-Earth Dependence Raises Concern
The comments come as automakers and governments seek to reduce their dependence on concentrated rare-earth supply chains.
The International Energy Agency estimates that China accounted for 91% of refined magnet rare-earth production and 94% of sintered permanent-magnet production globally. It said export controls introduced in 2025 caused supply difficulties for some automakers outside China.
India’s Ministry of Heavy Industries has also acknowledged that the domestic automotive industry, particularly electric and hybrid vehicles, depends on imported rare-earth permanent magnets.
In November 2025, the Union Cabinet approved a ₹7,280-crore scheme to establish 6,000 tonnes of annual integrated rare-earth permanent-magnet manufacturing capacity. The programme seeks to develop domestic capabilities from rare-earth oxides to finished magnets.
Rare-earth-free motors offer another route by reducing or eliminating the need for magnets rather than only creating alternative sources of supply.
Busch said MAHLE is discussing the removal of heavy rare-earth materials with several customers. Indian companies and start-ups are also developing motors that reduce their dependence on these materials, he added.