Highlights

• India's electric two-wheeler registrations plummeted 75% in Q2 2025, from 144,000 to 35,908 units.
• Over 90% of neodymium-iron-boron magnets are imported from China, exposing India's EV production dependency.
• The crisis highlights the need for domestic magnet production and strategic stockpiles in India's clean-tech ecosystem.

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India’s electric two-wheeler (e2w) market just hit a speed bump of rare earth proportions. According to The Hindu Businessline, registrations of electric scooters and bikes in Q2 (July–September 2025) plunged 75% year-over-year—from 144,000 units in 2024 to just 35,908 this year. The culprit? China’s tightened grip on rare earth magnet exports is the unseen but essential component powering India’s electric ambitions.

Rare Earth Exchanges (REEx) investigates the impact of the volatile rare earth element supply chain on the Indian production of e2Ws.

Signal in the Static: What’s Verified

The registration data itself checks out. India’s Ministry of Road Transport’s Vahan portal corroborates the reported plunge in e2w sales. The estimated magnet usage—roughly 690 tonnes for 1.15 million units sold in FY25—matches known intensity ratios for permanent magnet motors. Likewise, the total domestic magnet demand of 6,000–7,500 tonnes annually aligns with industry assessments from India’s Bureau of Mines and the International Energy Agency. In short, the numbers are credible, the shortage is real, and the dependency on China remains absolute.

Between the Lines: What’s Being Implied

The article suggests that Chinese export restrictions directly impacted Indian production starting in July. That’s plausible, but the causal chain deserves scrutiny. Beijing’s latest magnet export license regime tightened in early Q3. Still, manufacturers had already faced component shortages and price spikes months prior, partly due to India’s phase-out of certain FAME II subsidies and a decline in consumer demand following the election. In other words, rare earth scarcity is one piece of a more tangled web involving policy, pricing, and supply-chain inertia.

The Magnetic Undercurrent: What This Really Means

For India’s rare earth policy, this is a flashing red light. The country imports nearly all its neodymium-iron-boron (NdFeB) magnets—over 90% from China—despite possessing monazite-rich coastal sands. The sharp drop in e2w output highlights India’s vulnerability at the midstream (magnet-making) stage, rather than at the upstream ore supply stage. Domestic players, such as Easun Reyrolle and Tata Advanced Systems, have initiated pilot efforts in magnet fabrication, but none have yet scaled up.

The headline, while attention-grabbing, underplays a deeper truth: without a magnet ecosystem, India’s EV revolution runs on borrowed parts.

Final Take

Businessline’s piece gets the data right but simplifies the diagnosis. This isn’t just about China’s export rules—it’s about a missing industrial link in India’s clean-tech value chain.  REEx suggests that this unfolding reality should prompt policymakers to move faster on domestic magnet production and strategic stockpiles, not just headline lamentation.

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