China trapped by its own ‘tricks’: Rare earth ban backfires on…, has it affected India?

Beijing: The ban, which China has imposed on rare earth elements, could emerge as a big problem for its own companies. Chinese companies are also feeling the heat of the ban and not getting the rare earths. China’s role in rare earth elements is very crucial, as it is the world’s largest rare earth producer and processor. The country alone supplies 60 to 70 percent of the world’s supply. China is also responsible for 90 percent of the rare earths processing. Notably, 90 percent of the rare earth elements in India are imported from China. However, the ban has now raised concerns for Indian automobile companies and companies related to China.

Why Is The Rare Earth Ban Affecting Indian As Well As Chinese Companies?

JSW MG Motor India, in which China has some stakes, stated that the non-availability of rare earths has started affecting the company as much as other Indian auto companies. As per a report by Autocar Professionals, JSW MG Motors managing director Anurag Mehrotra said that the Beijing’s connection with SAIC Motors doesn’t give them any advantage, and they are also facing the scarcity of rare earth elements.

Notably, China’s state-owned company SAIC Motors owns MG Motor, which is a British automotive brand. The company bought MG Motor in 2007 following the purchase of Nanjing Automobile Corporation, which had purchased the company from the defunct MG Rover Group.

Is There A Major Supply Problem?

According to MG Motors officials, the company is keeping an eye on the situation and, as of now, not facing a major supply problem. However, Mehrotra warned that the real challenge for the aur industry will come in the coming months. He informed that the company is getting the part that it had ordered in April. The JSW MG Motors managing director said that the problem of rare earth is not limited to electric vehicles, but the rare earth magnets may also affect the petrol-diesel vehicles. Rare earth magnets are also used to make parts of petrol-diesel vehicles.

Will MG Motor’s Production Stop In Coming Months?

Currently, there is no major disruption in the production but the company is monitoring the situation. The issue has been raised at the industry level, and the company’s association is working closely with the government.

What Is The Impact Of Rare Earth Shortage On Indian Companies?

India’s electric two-wheeler makers are feeling the heat from a growing shortage of rare earth magnets, which is a crucial component in EVs. Major players like Ather Energy, Bajaj Auto, and TVS Motor have warned that their production could be impacted due to China’s export restrictions.

With supplies running low, companies are now scaling back. As per a report by the Economic Times report, Bajaj Auto plans to cut its production capacity by around 50 percent. Ather Energy may also do the same by reducing its output by 8–10 percent.

News