Mahindra Group will take engineering steps to tackle the crisis of rare earth magnets, as revealed by the Group's Chief Financial Officer.
In the automotive industry, a significant challenge has arisen due to the rare earth magnet shortage, affecting companies such as Maruti Suzuki, Hyundai Motor India, and Mahindra & Mahindra. However, these companies are not standing still in the face of this issue.
Mahindra & Mahindra (M&M) has managed FY26, according to M&M Group Chief Financial Officer Amarjyoti Barua, and is working on medium and long-term actions to address the problem. Similarly, Hyundai Motor India and Maruti Suzuki are also taking steps to mitigate the rare earth magnet shortage, with no production issues reported so far.
The scarcity of these essential components, which are used in multiple sectors including automobiles and renewable energy, has led to China imposing export restrictions on key rare earth magnets. This has resulted in supply chain bottlenecks.
To combat this, automobile manufacturers are implementing strategic solutions. One such approach is the development of alternative electric motor technologies that reduce or eliminate rare earth magnet use. For instance, some manufacturers and regions are shifting towards externally-excited synchronous motors (EESM), which use copper wire rotors instead of magnets, reducing reliance on rare earths.
Another strategy involves investing in new rare earth supply chains outside China. Automotive firms, including global peers, are forming international partnerships, ramping up domestic mining (like US initiatives), and securing alternative supplies from countries like Australia and Canada to reduce dependency on China’s near-monopoly.
Improving rare earth magnet technology to use less heavy rare earth metals, such as dysprosium and terbium, through advanced manufacturing techniques like grain boundary diffusion, is another method being employed. This reduces material cost and limits exposure to the most constrained elements.
Recycling of rare earth magnets from end-of-life vehicles and manufacturing scrap is another promising solution. Recycling can lower energy use by 75-85% compared to mining and helps create a supplementary supply of rare earth elements. Some companies are pioneering hydrogen-based recycling methods, although feedstock purity and collection remain challenges.
While direct statements from Mahindra, Maruti Suzuki, and Hyundai specifically were not found, these approaches reflect broader automotive industry trends that these companies are likely following, given their dependence on rare earth magnet-based traction motors and the global push towards supply chain resilience, sustainability, and innovation.
M&M has taken steps to build inventory through alternative sources to address the problem, but there is no information about any engineering solutions being developed by Maruti Suzuki or Hyundai Motor India to address the rare earth magnet shortage. The Mahindra XUV500 2025, an upcoming car with a 2179 cc diesel engine and a price of ₹ 12 Lakhs, and the Mahindra e20 NXT, an upcoming car with a 15 kWh battery, a range of 140 km, and a price range of ₹ 6 - 8 Lakhs, are not expected to be affected by the rare earth magnet shortage in the near future. Neither Maruti Suzuki nor Hyundai Motor India have reported any significant risks or problems related to the rare earth magnet shortage for the next nine months.
Mahindra & Mahindra, Hyundai Motor India, and Maruti Suzuki, amidst the global rare earth magnet shortage, are exploring various strategies to mitigate the issue. Automotive manufacturers, such as these companies, are adopting approaches like developing alternative electric motor technologies, investing in new rare earth supply chains outside China, improving rare earth magnet technology, and recycling rare earth magnets to reduce dependency on China's near-monopoly.
