It’s a Saturday morning in Peenya, one of Asia’s largest industrial hubs on the outskirts of Bengaluru, and the Chara Technologies factory is buzzing. Rows of steel housings and copper windings sit neatly on shelves. Behind, torque curves, lamination charts, and controller schematics hang on the walls. Inside a yellow safety cage, a motor designed and manufactured by the company is undergoing tests for its torque rating. 

An engineer switches off the dynamometer used to measure the torque, satisfied with the result. “It matches a PMSM on torque,” he declares. 

PMSM, or permanent magnet synchronous motor, is the type most widely used in the automotive industry. It uses magnets made from alloys of rare-earth elements like neodymium and dysprosium, which give the motor its high torque density, compact size, and efficiency. Chara, in contrast, produces magnetless motors.

A sound business idea on paper: almost all Indian electric vehicles run on PMSMs and 94%IEAWith new export controls on critical minerals, supply concentration risks become reality of their magnets come from China. It became clear after Beijing imposed export restrictions on rare earths this year that India—which importedIndia TodayChina's rare earth threat magnets worth Rs 300 crore ($33 million) in FY25, mostly from its industrial behemoth of a neighbour—needed to look elsewhere for rare-earth magnets. Or, preferably, beyond them. 

The Chinese curbs hit Indian automakers hard. BajajReutersIndia's Bajaj Auto flags lower-than-planned EV output on rare earths crunch cut its two-wheeler production target by 50% for the second quarter while its rival TVS Motor cited the lack of magnet availability for not growing beyond 8% in the second quarter of FY26. Fellow segment player Ather said in an earnings call earlier in November that the shortage hit its second-quarter revenue by Rs 19 crore.

The crisis, then, seemed tailor-made for the likes of Chara, which had been around for over five years before the rare-earth crisis unfolded, to seize the market.

It didn’t take, despite the auto industry having announced plans to investPIB The Make in India Auto Story $7 billion to boost localisation.