2025 E-Bike : The electric bike (e-bike) industry has been riding a wave of popularity, transforming urban mobility with eco-friendly, efficient, and accessible transportation.
In 2025, e-bikes are more than just a trend—they’re a movement, especially in cities where traffic congestion and carbon emissions are pressing concerns. However, a looming crisis threatens to derail this momentum: a global shortage of rare earth elements (REEs), critical components in e-bike motors and batteries.
This article dives into the heart of the issue, exploring why the e-bike boom is at risk, the role of rare earths, and what the industry and governments are doing to navigate this roadblock.
The E-Bike Surge: A Global Phenomenon
E-bikes have become a staple of modern transportation, offering a practical alternative to cars and public transit. From delivery riders zipping through city streets to commuters dodging traffic, e-bikes are versatile, affordable, and environmentally friendly.
In 2025, global e-bike sales are projected to surpass 40 million units, driven by urbanization, rising fuel costs, and government incentives for green transport. Countries like China, India, and those in the European Union are seeing unprecedented demand, with e-bike adoption growing by double digits annually.
The appeal is clear: e-bikes cover longer distances than traditional bicycles, require less physical effort, and emit zero tailpipe emissions. They’re also cheaper to operate than cars or motorcycles, making them a favorite in developing economies like Rwanda, where ambitious plans aim to convert 100,000 motorbikes to electric by 2030.
But this rapid growth hinges on a steady supply of critical components, particularly rare earth magnets used in e-bike motors, which now face a significant supply chain bottleneck.
The Rare Earth Dilemma
Rare earth elements—such as neodymium, dysprosium, and praseodymium—are essential for the high-performance magnets (NdFeB magnets) that power e-bike motors. These magnets are prized for their strength and efficiency, enabling lightweight, powerful motors that give e-bikes their edge.
REEs are also used in battery management systems, sensors, and other components, making them indispensable across the electric vehicle (EV) sector, including e-bikes.
The problem? China dominates the global supply of REEs, producing roughly 90% of refined rare earths. In April 2025, Beijing introduced stringent export restrictions on seven key REEs, including neodymium and dysprosium, requiring special licenses and government approvals.
This move, widely seen as a response to U.S. tariffs, has sent shockwaves through industries worldwide, with automakers and e-bike manufacturers scrambling to secure supplies. As of June 2025, Indian firms, which rely on China for 85% of their rare earth magnets, have yet to receive export approvals, raising fears of production halts by July.
Why China’s Restrictions Matter
China’s export curbs aren’t new—they’ve weaponized REEs before, notably in 2010 against Japan over a territorial dispute. But the 2025 restrictions are broader and more impactful, affecting not just e-bikes but also EVs, wind turbines, and consumer electronics.
The timing is particularly tough for the e-bike industry, which was already recovering from semiconductor shortages and pandemic-related disruptions. With global demand for NdFeB magnets expected to grow by 15% in 2025, driven by EVs and renewable energy, the supply crunch could push prices up and delay production.
For e-bike manufacturers, this means higher costs and potential delays in launching new models. In India, companies like Ola Electric, Bajaj, and Ampere face uncertainty, with some premium e-bike launches potentially pushed to late 2026. Higher-end models, which rely heavily on REE-dependent technologies, are likely to be hit hardest, forcing manufacturers to pivot to simpler, mid-range designs to keep production lines moving.
The Global Impact on E-Bike Production
The ripple effects of the REE shortage are felt worldwide. In Europe, where e-bikes are a cornerstone of sustainable urban planning, manufacturers like Germany’s Bosch and France’s Valeo are grappling with magnet shortages. In the U.S., companies are exploring motors with low-to-zero rare earth content, but scaling these alternatives remains costly and slow. The EU’s Critical Raw Materials Act aims to boost domestic REE production, but progress is lagging, leaving manufacturers vulnerable.
In Africa, where e-bike adoption is seen as a leap toward green mobility, the shortage threatens ambitious projects like Rwanda’s plan to electrify its motorbike fleet. Startups in the region are innovating with solar-powered charging stations and battery-swapping systems, but without reliable magnet supplies, scaling production is a challenge.
Table: Rare Earth Elements and Their Role in E-Bikes
|
Rare Earth Element |
Use in E-Bikes |
Impact of Shortage |
|---|---|---|
|
Neodymium (Nd) |
NdFeB magnets for motors |
Higher motor costs, production delays |
|
Dysprosium (Dy) |
Enhances magnet heat resistance |
Limited availability for high-performance motors |
|
Praseodymium (Pr) |
NdFeB magnet production |
Increased prices, supply chain disruptions |
|
Terbium (Tb) |
Improves magnet performance |
Shortages affect premium e-bike models |
Solutions and Alternatives
The REE crisis has sparked a global race to diversify supply chains and reduce reliance on China. Here’s how the industry and governments are responding:
1. Diversifying Supply Chains
Countries like Australia, Canada, and South Africa are ramping up REE production. Australia’s Iluka Resources is developing the Eneabba refinery, aiming to provide a stable supply of neodymium and praseodymium. In Africa, new mines in Malawi and South Africa are set to contribute 9% of global REE supply by 2029, with projects like Songwe Hill and Steenkampskraal coming online in 2025. These efforts aim to create a more resilient global market, but scaling up takes time—often years—due to the complex, multi-stage process of mining and refining REEs.
2. Developing Alternative Technologies
Some manufacturers are exploring motors with reduced or no rare earth content. For example, General Motors and BMW are investing in alternative motor designs, but these are not yet cost-competitive for mass-market e-bikes. Recycling REEs from old electronics and batteries is another avenue, though current recycling rates are low, and the technology is still developing.
3. Government and Industry Collaboration
Governments are stepping in with incentives and policies. The U.S. Department of Defense has invested over $439 million since 2020 to build a domestic REE supply chain, targeting a “mine-to-magnet” system by 2027. India’s government is engaging diplomatically with China to expedite export approvals while exploring domestic magnet manufacturing. The EU’s Critical Raw Materials Act is pushing for local sourcing, and France’s Less Common Metals is investing €110 million in a new REE facility.
4. Sustainable Practices
Environmental concerns are also shaping the response. Mining REEs is resource-intensive and often polluting, prompting companies to adopt cleaner extraction methods. Australia’s focus on sustainable processing, for instance, aligns with global demands for ethical supply chains, which could attract investors and stabilize markets.
The Human Side of the Crisis
Beyond the numbers, the REE shortage affects real people—workers, riders, and small businesses. In India, e-bike delivery riders like Arjun, a 28-year-old from Mumbai, rely on their bikes for a living. “If prices go up or bikes aren’t available, I can’t work,” he says. Manufacturers, too, face tough choices, with smaller firms at risk of shutting down if they can’t secure supplies. Meanwhile, consumers may see higher e-bike prices, making them less accessible to low-income households.
On the flip side, the crisis is spurring innovation. Startups in Rwanda are finding creative ways to keep e-bikes on the road, like solar-powered chargers, while engineers in Europe are designing more efficient motors. These efforts show the resilience of an industry determined to keep the e-bike revolution alive.
What Lies Ahead
The e-bike boom of 2025 is at a crossroads. While the REE shortage poses a serious threat, it’s also a wake-up call for the industry to diversify and innovate. Analysts predict that prices for key REEs like neodymium may stabilize in 2025 as China adjusts its quotas and global supply grows, but deficits are likely by year-end. For now, e-bike manufacturers must navigate a delicate balance: maintaining production, managing costs, and meeting consumer demand in a volatile market.
The road ahead isn’t smooth, but the e-bike industry’s adaptability—coupled with global efforts to secure REE supplies—offers hope. If governments, manufacturers, and innovators can work together, the e-bike boom can keep rolling, bringing cleaner, greener mobility to cities worldwide.
FAQs
Q: Why are rare earth elements critical for e-bikes?
A: Rare earths like neodymium are used in powerful magnets for e-bike motors, ensuring efficiency and performance.
Q: How is China’s export restriction affecting e-bike production?
A: Restrictions are causing supply shortages, delaying production, and increasing costs, especially for premium models.
Q: Are there alternatives to rare earth magnets?
A: Yes, but alternative motor designs are costly and not yet scalable for mass-market e-bikes.
Q: What are governments doing to address the shortage?
A: Countries like the U.S., Australia, and India are investing in domestic REE production and diplomatic efforts to secure supplies.