Chara Technologies has commercialized a highly efficient alternative to magnets made from rare earth minerals – whose exports were recently banned by China without proper license.
15 Apr 2025 | 543 Views | By Shahkar Abidi
In the early 2010s, as India’s digital economy was still in its infancy, a small startup named Ezetap Mobile Solutions entered the payments scene with an ambitious idea. The Bengaluru-based company promised to turn any mobile phone—smart or basic—into a point-of-sale device using a compact card reader.
It was ...
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In the early 2010s, as India’s digital economy was still in its infancy, a small startup named Ezetap Mobile Solutions entered the payments scene with an ambitious idea. The Bengaluru-based company promised to turn any mobile phone—smart or basic—into a point-of-sale device using a compact card reader.
It was an ambitious move in a country still largely reliant on cash. Despite signing on major clients like Amazon and BigBasket, Ezetap’s path to stability was anything but smooth. Co-founder Bhaktha Keshavachar and his team were caught in the relentless cycle of building, pitching, and fundraising—challenges typical of an early-stage startup.
However, a 'Blackswan' moment came to the company’s rescue. On November 8, at 8 p.m., Prime Minister Narendra Modi shocked the nation by announcing the demonetization of Rs 500 and Rs 1,000 notes—a policy aimed at tackling black money. Virtually overnight, cash disappeared from the economy, and digital payments gained centre stage. Fintech platforms like Paytm, PhonePe, and M2P scaled rapidly, riding the wave of a digital revolution. Ezetap also found renewed traction, which culminated in its acquisition by Razorpay in 2022 for an estimated $100–$120 million.
Now, in 2025, Keshavachar is channeling his entrepreneurial drive into a very different sector—electric mobility. His latest venture, Chara Technologies, is developing a new type of electric motor that could change the game. These motors, called permanent-magnet synchronous motors (PMSM) or Synchronous Reluctance Motors (or SynRMs for short), are designed to work without rare earth magnets.
That’s a big deal because rare earth elements are expensive, hard to source, and raise significant environmental concerns due to the way they are mined. "They (permanent-magnet synchronous motor or BLDC) work quite well, but they have one problem. They need these magnets to make them work," Keshavachar told Autocar Professional.
Synchronous Reluctance Motors
In layman's language, both SynRMs and PMSM are “synchronous” motors, which means the spinning part (called the rotor) moves in sync with the magnetic field created by the electricity in the motor. But they work differently inside.
PMSMs have strong magnets (usually made from rare earth materials like neodymium phosphorus or, sometimes rarely, cobalt) placed inside the rotor. These magnets help create a magnetic field that keeps the rotor spinning with the stator’s rotating magnetic field. Today PMSM motors or Brushless DC (BLDC) motors-both of which utilize permanent magnets, are used widely in all mobility vehicles.
On the other hand, instead of magnets, SynRMs motors use a clever rotor design with air gaps and metal. These create “magnetic reluctance,” which means the rotor naturally wants to follow the path where magnetic resistance is lowest—causing it to spin in sync.
There’s a catch, though—SynRMs tend to be 10 to 15% heavier than traditional motors. But the trade-off appears to be well worth it. Despite the added weight, these motors match—and in some cases outperform—the more commonly used Permanent Magnet Synchronous Motors (PMSMs) in terms of efficiency and performance. Take Chara’s 5.7-kilowatt SynRMs as an example.
It delivers a peak efficiency of 94% and operates at 92% efficiency during regular use. On the road, it powers vehicles for up to 147 kilometers on a single charge. In contrast, a comparable PMSM with 5.2 kilowatts offers the same peak efficiency of 94%, but slightly less performance in day-to-day use at 87% duty cycle efficiency, and a shorter range of 138.5 kilometers.
Market Dynamics and Industry Response
The global traction motor market, valued at $48 billion in 2024, is projected to nearly double to around $95 billion by 2030. Major players like Dana, Bosch, Siemens, Mahle, and Nidec have traditionally focused on permanent magnet motors. However, the transition to rare-earth-free alternatives poses challenges due to existing investments in current technologies. Some of the legacy players have now also transitioned to the non-rare-eart motors.
Recognizing the potential, new-age companies like Advanced Electric Machines (AEM) in the UK have entered the market, with AEM raising $29 million in November 2023. Chara Technologies, with approximately 40% of its business stemming from the automotive segment, initially focused on two-wheelers, three-wheelers, and small four-wheelers. Over time, the company realized its broader potential, with over 60% of its clientele now comprising non-auto sectors, including agricultural equipment, industrial loaders, and off-highway applications like golf carts.
Geopolitics
The reliance on rare earth elements has significant geopolitical ramifications. India's dependence on China for these materials poses strategic vulnerabilities. Keshavachar highlighted, “Our friendly neighbor China has 90% control over the supply chain of rare earths. It is a well-known fact now. And it's becoming worse on a monthly basis.” Moreover, the environmental impact is profound; for every ton of rare earth metals extracted, approximately 2,000 tons of radioactive waste are produced.
A 2022 report by the U.S. Department of Energy emphasized China's dominance, accounting for about 90% of global rare earth extraction and magnet production between 2017 and 2021. Given that magnets constitute roughly 40% of a motor's cost, the financial implications are substantial.
Looking at the broader market, the future seems promising. The global electric motor market is projected to soar to $225 billion by the end of 2030, while India's market is expected to reach $4.16 billion within the same timeframe. Amid these figures, Keshavachar’s comment on the evolving geopolitical landscape stands out: “The world is no longer unipolar or bipolar—it’s multipolar. Not that we want something drastic to happen, but I think something like that will also propel us quickly to larger deployments.”
Global Outreach
Despite launching just before the COVID-19 pandemic, Chara Technologies secured a significant grant from the Indian Institute of Science in 2020, signaling governmental support for indigenous deep-tech solutions. Subsequent funding rounds included a $1 million seed investment from Kalaari Capital and IIMA Ventures in 2021, followed by a $5 million round led by Exfinity Venture Partners in January 2023.
By the fourth quarter of 2023, Chara began commercial sales, with clients like Atul Auto, Ward Wizard, Ampere, Vaidyuthi Mobility, and Altigreen. The company also established partnerships with multinational corporations, including Toyota, Forvia Hella, Stellantis, Volvo, and Mercedes. Currently, Chara boasts over 30 clients in various stages of testing and deployment, with European customers like a large Italian firm using their motors for scissor lifts and a Belgian company integrating them into agricultural equipment.
Keshavachar noted the global relevance of their solution: “The reason I'm highlighting the European customers is that the rare earth problem is a worldwide problem. And there is a lot of interest now, especially from all over the world, for building an alternate solution to the rare earth-based motors which are widely used today.”
Looking ahead to FY26, Chara aims to deploy 12,000 electric motors, projecting revenues exceeding Rs 40 crore. Long-term goals include scaling revenues to over Rs 2,778 crore and selling more than 500,000 motors by FY31. The company is also investing in research on alternative materials and technologies to further enhance sustainability and performance.
Interdisciplinary approach
Developing advanced motor systems necessitates a multidisciplinary approach, blending expertise in electromagnetics, mechanical systems, hardware, and embedded software. Chara's team, comprising 75 members with around 55 to 60 in engineering and 15 to 20 in manufacturing, reflects this diversity. The company has successfully attracted talent from prestigious institutions like Carnegie Mellon and various European universities, many of whom returned to India to contribute to deep-tech innovations.
Keshavachar emphasized, “So we are solving one piece of the puzzle in the energy transition. We're not solving all problems. But at least one critical piece.”
Long term game
As India looks to replicate its digital successes in the realm of electric mobility, Keshavachar offers a grounded perspective: “I don't think we can scale up electric vehicles like UPI has.”
Unlike the Unified Payments Interface, which rapidly transformed the digital payments landscape with minimal physical infrastructure, the EV ecosystem hinges on large-scale manufacturing, robust supply chains, and deep capital investment. The journey, he cautions, will be gradual.
“It’ll take at least a decade before it comes big,” he adds. Yet with players like Chara Technologies tackling one of the sector’s most fundamental challenges—the motor itself—India’s transition to sustainable mobility may be slow, but it's steadily gaining momentum