Mahindra & Mahindra Adopts Engineering, Supply Strategies to Tackle Rare-Earth Magnet Shortage

Mahindra & Mahindra (M&M) is implementing a dual strategy to manage the growing shortage of rare-earth magnets, a key component in electric vehicle (EV) motors, power steering systems, and other advanced automotive applications. The company’s Chief Financial Officer, Amarjyoti Barua, stated that while short-term concerns are being addressed through alternate sourcing and inventory buildup, long-term engineering solutions are being explored to reduce material dependency.

In the near term, M&M has secured supply from non-traditional sources and built sufficient buffer stock to manage operations through fiscal year 2025–26. “FY26 is more or less managed,” Barua said, indicating that the immediate impact of the supply crunch is under control.

For the medium to long term, Mahindra is focusing on engineering interventions aimed at redesigning systems to reduce or eliminate the need for rare-earth magnets. These efforts align with the industry-wide trend of seeking alternative technologies amid increasing geopolitical and supply chain risks.

The shortage has been largely driven by recent export restrictions from China, which dominates over 90% of the global rare-earth magnet market. The situation has sparked widespread concern across the auto industry, with several manufacturers—including Maruti Suzuki and Hyundai—also initiating contingency plans, though they have not reported any disruptions so far.

Analysts warn that if current trends continue, critical inventories—especially of neodymium-iron-boron magnets—could be depleted by mid-2025, threatening EV and smart vehicle production lines. Given the auto sector’s growing reliance on electrification and intelligent systems, manufacturers are under pressure to enhance supply chain resilience.

Mahindra’s approach—combining tactical inventory measures with long-term engineering innovation—is aimed at ensuring operational stability while advancing its EV roadmap. The strategy also reflects a broader shift across the industry toward more sustainable and adaptable component sourcing models.