China’s Rare Earth Export Curbs Bite Indian Automakers, Maruti Cuts Near-Term EV Production

Maruti Suzuki has slashed near-term production targets for its electric vehicle e-Vitara by two-thirds. The automaker has decreased its target of producing 26,500 e-Vitaras to 8,200 between April and September due to a shortage of rare earths driven by China’s export curbs. The company mentioned “supply constraints” on rare earth materials, which are crucial for making magnets and other key auto components across a range of hi-tech industries, Reuters reported, citing a document. This comes just a day after Maruti Suzuki said that it has not witnessed any impact from the rare earth materials supply issues. 

The auto giant has reportedly made no changes to its output target of 67,000 EVs for the financial year 2026 and has planned to cover up for reduced manufacturing in the subsequent months. Suzuki has already stopped production of the Swift, barring the Swift Sport version from May 26, citing a shortage of components, Reuters had earlier reported.

Also Read: Why China’s New Rare Earth Policy Has Cast a “Dark Cloud” Over India’s EV Industry

The setback for the auto and electronics industries came after China, on April 4, announced that the export of seven rare earth materials from the country will now require special permits, accompanied by end-use certificates confirming non-military usage. These seven rare earth materials include samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium. 

But Maruti Suzuki isn’t the only automaker that is feeling the pinch of Beijing’s decision. Giants like Ford, BMW, Mercedes and Nissan, too, have been forced to halt or scale down production due to a rare earth magnet shortage. Nissan CEO Ivan Espinosa had earlier said that the auto major is holding talks with the Japanese government to secure an alternative supply chain. 

Govt’s Move to Address Chinese Curb 

Commenting on the development, commerce and industry minister Piyush Goyal on Monday said China’s decision to restrict rare earth material is a “wake-up call” for India and the world. He said that the Indian government is actively working with stakeholders from the industry to explore alternative supply chains and simultaneously develop domestic capabilities. 

“Obviously, there are issues around the stopping of permanent magnets from China to India, which will affect our auto sector, especially two-wheelers and other industries. India is actively working with stakeholders to develop domestic capacity and reduce dependence on China,” said Goyal, Business Today reported.