Indian EV-makers may struggle as China stops key material's supply
What's the story
Chinese authorities have restricted the export of rare earth magnets to India, effective April 4, according to CNBC.
The move presents fresh production hurdles for Indian electric vehicle (EV) and auto component manufacturers.
The abrupt supply halt could jeopardize production schedules and slow down the growth of India's burgeoning EV sector.
New requirement
Exporters now need end-user certificates
The new Chinese regulation requires exporters to supply rare earth magnets only to those companies that provide an end-user certificate in a specific format.
The certificate must be approved by India's Ministry of External Affairs and the Chinese Embassy.
Further, it should confirm that the magnets won't be used in weapons or transferred to third parties.
Request for support
Indian automakers seek government assistance
In light of these new regulations, Indian automakers and component manufacturers have approached the government for help.
They apprehend that these restrictions could break supply chains and slow down EV production.
The Chinese government's demand for end-user certificates is viewed as a major roadblock in the way of India's EV industry.
Information
Rare earth magnets are essential for EV production
Rare earth magnets are essential for manufacturing EV components. They are utilized in traction motors, which convert electrical energy into mechanical energy to propel the vehicle. The abrupt stoppage in supply could derail production timelines and hinder the growth of Indian EV sector.