EVs Could Soon Face Long Waiting Periods: China Effect!

A magnet smaller than a coin could soon determine whether you get your new electric car this year or wait well into 2026. As bizarre as it sounds, this microscopic component has become the automotive industry's biggest headache, threatening to transform already lengthy EV waiting periods into endless queues.

The crisis brewing behind factory gates isn't about batteries, semiconductors, or charging infrastructure. It's about rare earth magnets: those powerful little components that make electric motors spin efficiently. Without them, even the most advanced electric vehicle becomes an expensive paperweight.

When Supply Lines Snap

China's decision in April to tighten export controls on rare earth magnets has sent shockwaves through global automotive supply chains. The new rules require detailed declarations about end-use and customer information, with approval processes stretching at least 45 days. For an industry operating on just-in-time manufacturing principles, this represents a seismic shift.

The numbers tell a stark story. Over 80% of the rare earth magnets used in vehicles come from China, which processes about 90% of the world's supply. When Beijing imposed these restrictions, it effectively held a chokehold on global vehicle production. By late May, whilst Indian authorities had endorsed nearly 30 import requests from domestic companies, Chinese officials hadn't approved a single one.

The timing couldn't be worse. Electric vehicle sales hit an all-time high in May, with consumers eagerly booking everything from affordable two-wheelers to premium SUVs. Manufacturers had been gearing up for aggressive EV rollouts, with over a dozen new electric models planned for launch. Most of these vehicles rely on permanent magnet synchronous motors, which need rare earth magnets to function efficiently.

The Ticking Clock

Automotive executives are watching their inventory levels with growing anxiety. Most manufacturers maintain just four to six weeks of magnet supplies, a strategy that worked perfectly when shipments arrived like clockwork. Now, with no new deliveries since mid-April, these stockpiles are dwindling rapidly.

If the impasse continues beyond June, production lines could start grinding to a halt by July. Electric vehicle launches might face deferrals or complete rescheduling. The ripple effect could extend beyond EVs to conventional vehicles, which also use these magnets in electric power steering systems and various motorised components.

For consumers, this translates into a sobering reality: waiting periods that currently range from one to three months could stretch significantly longer. The MG Comet EV, which presently has minimal waiting times in most cities, might join the ranks of vehicles with multi-month queues. Premium electric SUVs, already commanding waiting periods of up to two months, could see these timelines double.

Racing Against Time

The industry isn't sitting idle. Manufacturers are frantically exploring alternative supply sources, with Vietnam and Indonesia emerging as the most promising near-term options. Japan produces rare earth magnets, though their quality doesn't quite match Chinese standards. Negotiations are also underway with suppliers in Australia and the United States, but these discussions could take 60 days or more to materialise.

Meanwhile, diplomatic channels are working overtime. The Society of Indian Automobile Manufacturers is planning a delegation to China, whilst government officials are engaging with the Chinese Embassy in New Delhi. There's hope that some temporary arrangements might resume limited shipments whilst longer-term solutions take shape.

Domestic production offers another avenue, though it's more of a long-term play. The state-owned Indian Rare Earths Limited operates a facility in Visakhapatnam that produces about 3,000 kilograms of rare earth magnets annually which is barely enough for a small electric vehicle manufacturer when a typical EV can use half a kilogram of these materials.

The Bigger Picture

This crisis has exposed the vulnerability of putting all supply chain eggs in one basket. Despite sitting on the world's third-largest rare earth reserves, domestic production remains negligible. Mining and processing these materials requires significant investment and sophisticated technology, with new facilities typically taking six years to become operational.

Some manufacturers are exploring innovative alternatives. Switched reluctance motors that don't require rare earth magnets offer one possibility, though they're less efficient. Others are investigating ferrite magnets, which are less powerful but more readily available.

The current shortage might prove to be the wake-up call the industry needed. As one executive noted, this situation highlights the critical importance of building resilient supply chains rather than chasing the lowest costs.

For now, prospective EV buyers face an uncomfortable truth: that coin-sized magnet might determine whether their electric dreams become reality this year or remain on hold indefinitely.