This Indian Startup Is Ditching China's Rare Earth Grip With Smarter EV Motors
Remember the pandemic era when automakers worldwide had no option but to cry havoc as semiconductor supplies ran short? The world has been juggling a similar fate for the last two months. But, it’s neither the pandemic nor the semiconductor bottleneck that’s back to haunt the global automotive industry. It’s something more crucial — rare earth elements.
Sending a clear message to US president Donald Trump’s tariff move that China is not to be meddled with, the East Asian nation has banned the export of rare earth minerals.
China’s stance has left many in the lurch, including India. This is simply because China controls nearly 90% of the world’s rare earth minerals. The second blazing problem at hand is that automakers cannot do without these elements as these are used in everything – from speedometers to paints, glasses and electronic components, especially permanent magnets used in electric motors.
These rare earth magnets, known as neodymium-iron-boron (NdFeB) magnets, are indispensable to the . Without them, EVs cannot function efficiently.
While diplomatic negotiations are ongoing, uncertainty looms large, and industry experts look for alternatives to reduce reliance on Chinese rare earths.
However, what’s interesting is that former Ezetap cofounder Bhaktha Keshavachar predicted this crisis nearly a decade ago. Therefore, he set out to address it, along with automotive veterans Mahalingam Koushik and Ravi Prasad.
Together, they incorporated Chara Technologies, which today claims to have built a range of synchronous reluctance motors that do not require rare earth materials.
These motors use reluctance to generate torque and are about 5% more efficient than traditional rare-earth-based motors, according to the founder.
Amid intensifying geopolitical tension over rare earth, the startup seems to be sitting on a gold mine. Now, before we delve deeper into how the startup is set to rake in a juicy chunk of a growing market opportunity, courtesy electric vehicles, let’s steal a glance at how Chara came into being.
Keshavachar came up with the idea to give to the world rare-earth-free motors before exiting Ezetap in 2021, when Razorpay acquired the payments solution startup.
After working with Intel for more than a decade, he thought of changing the future of mobility in India. “The core idea behind establishing Chara, meaning motion in Sanskrit, was to find a sustainable solution for the movement of EVs,” Keshavachar said.
However, he had his limitations. He wasn’t even remotely associated with the automotive industry or building motors.
So, how did the idea as distant as building non-rare earth motors for EVs come to fruition?
To address his Achilles heel, Keshavachar onboarded Koushik, a former colleague at Ezetap, and Ravi Prasad, an industry veteran. The trio came to the drawing board and started working on blueprints to develop tech that could support mobility in electric vehicles.
The startup received a major boost when IISc Bengaluru supported their vision with a grant of INR 25 Lakh, enabling initial prototyping and development.
“We are moving into an electric future, and motors will be central to this transformation. But relying on rare earths, which are unsustainable both economically and environmentally, makes no sense,” Keshavachar said.
EVs use two types of motors — the permanent magnet synchronous motor (PSMS) and brushless DC (BLDC) motor, which require rare earths for generating significant power and efficiency. The founder has a problem with rare earths being used to develop motors.
According to him, the entire point of envisioning a green future gets defeated when we start relying on rare-earth motors.
“Not only is the mining and extraction of the rare earths expensive and difficult, but every tonne of rare earth generates 2,000 tonnes of toxic, radioactive waste. Therefore, we have decided to take a step ahead to make a change,” Keshavachar said.
Besides, the founder said, he, along with other cofounders, had envisioned that the one who would control the supply chain to these crucial minerals would one day take advantage of their position someday — exactly what China is doing now.
“We wanted to pick and solve a problem that would have a lasting impact for decades to come.”
In an attempt to make green mobility greener, the team started working on reluctance motors. In the first 18 months after its inception in 2019, Chara focussed on developing switched reluctance motors. By 2021-end, the founders realised that the tech was difficult to scale. Therefore, they pivoted to building synchronous reluctance motors.
By this time, the startup had raised $850K in seed funding from Kalaari Capital, CIIE.CO, and others.
After almost two years, in 2023, funding round from Exfinity Venture Partners and other existing investors. The full-fledged manufacturing of these rare-earth-free motors and controllers started from the December quarter of 2024.
Chara began shipping its final products in Q1 FY26 and is delivering around 150 motors per month.
According to Keshavachar, there are three kinds of motors — magnet-based motors (using permanent magnets), induction motors (low efficiency, used in appliances), and reluctance motors, which generate torque from reluctance.
“Reluctance motors have been around for almost 200 years but do not find their applications much due to engineering issues like low power density, torque ripple, and noise,” he said.
When the Chara team started working on the reluctance motor technology, it faced the same issue. Therefore, it pivoted to building synchronous reluctance motors, where the issues related to noise and torque ripple were largely addressed.
“The problem with reluctance motors is that they are highly non-linear, which makes them difficult to control. However, through the clever use of more computational power that is available today and enhanced algorithms, we were able to control them. With this, we have solved the fundamental problems in motor design, hardware architecture, and software algorithms, and all this took us three years,” the founder said.
Chara makes motors for electric vehicles and off-highway applications like agricultural equipment, industrial equipment, golf carts, lifts, and other industrial applications. Its portfolio of motors produces a peak torque of 25-125 Nm and peak power of 5.5-31 kW or 7.3-41.5 horsepower.
Chara’s motors have also received certification from the Automotive Research Association of India (ARAI) and the International Centre for Automotive Technology (ICAT) earlier this year.
According to the founder, these motors are 5% more efficient than the rare-earth motors. However, weight continues to be a challenge.
“We can’t fight physics. When we remove the powerful magnets, we also put more steel and copper to compensate for the loss of magnetic flux, and that’s what adds to the weight. So, we are about 10% bigger, and hence 10% heavier,” he said.
For context, a PMSM motor that goes into a three-wheeler weighs about 15 kg, while Chara’s motors weigh 19 kg.
While the difference is negligible when compared to the gross weight of a vehicle, the founders initially had a hard time convincing customers.
However, as the supply chain crisis enveloped the world, Chara is witnessing a shift in customer sentiment.
Today, the startup serves 50 customers, including large and small players from India and around the world. Chara also exports its motors and controllers to two European companies. The startup also counts the likes of Godrej, Greaves Cotton and Sonalika as its top clients in India.
So far, the startup has filed for nine patents. It is expected to receive two patents in the next quarter.
Chara’s Growing InfluenceAlthough Chara originally targeted to disrupt the EV market, about 60% of its revenue now comes from off-highway applications due to fewer regulatory hurdles.
Its bestselling motors are the 14 kW and 16 kW variants used in industrial machinery and three-wheelers. One European customer has chosen Chara as the exclusive motor supplier for its scissor lifts.
Of its 50 customers, five have placed big orders of as many as 100 motors. The order book from the remaining customers stands at 5-10 motors each.
While the founder did not share the exact revenue it earned in FY25, the startup had received orders worth INR 2.7 Cr during the year.
Chara’s current manufacturing facility has a capacity of producing 500 motors a month. It plans to scale its production to 2,000 motors a month by the end of 2025. To support its vision, the startup is in the process of raising INR 50 Cr to INR 60 Cr in Series A.
As of now, Chara has its sights set on selling 15,000 motors by the end of the ongoing financial year (FY26). If this pans out, the startup could rake in as much as $5 Mn in FY26 revenues.
Chara has also partnered with Greaves Cotton to manufacture its motors in the latter’s facility in the coming months. With this move, the startup is entering contract manufacturing to reduce its cost burden.
“While we are still considering if we should go for in-house manufacturing or contract manufacturing, what we know for sure is that we need to be in control,” Keshavachar said.
While the founder agrees that it is difficult to raise funds for a deeptech hardware startup like Chara in India, he expects to make the most of the ongoing geopolitical concerns around rare earth elements and their applications in electric vehicles.
However, there are a few challenges to tackle — one being the weight of the motors. While more efficient than rare-earth magnet motors, Chara offerings are 20-25% heavier. This could drag down the overall efficiency of a vehicle, be it a two, three, or four-wheeler.
As the world scrambles to reduce reliance on rare earths, Chara’s endeavour to build a future-proof tech is a brave step towards sustainability. However, the road ahead is not going to be easy, especially in the absence of patient capital.
[Edited by Shishir Parasher]
The post appeared first on .