Maruti Suzuki has reduced its production plans for the upcoming E-Vitara electric vehicle for the first half of the 2025-26 fiscal year. According to a company document, the automaker intends to produce only around 8,221 units between April and September 2025, significantly less than the original target of approximately 26,512 units. This reduction is primarily attributed to the global shortage of rare earth metals.
China’s restrictions on the export of rare earth materials have limited the availability of essential components like magnets, crucial for EV production. While manufacturers in the US, Europe, and Japan have managed to secure new licenses, Indian manufacturers are still awaiting similar approvals.
Suzuki aims to compensate for the production shortfall by increasing output in the second half of the year. Simultaneously, discussions between China and the EU regarding price commitments for Chinese-made vehicles exported to the EU are nearing completion, as revealed by reports.
The issue has been discussed between Chinese commerce Minister Wang Wentao and EU trade Commissioner Marcos Sefcovic. In April, China’s decision to suspend exports of a wide range of rare earths and related magnets has impacted automakers across Europe. China’s dominance in the critical mineral industry, which is key to green energy transition, serves as a major point of leverage.
This issue is not limited to the global auto industry. It has also affected the global supply chains of necessary components for EV battery production. Aerospace manufacturers, semiconductor companies, and military contractors worldwide are experiencing similar challenges. China produces about 90% of the world’s Rare Earth Minerals. Manufacturers such as Mercedes Benz are actively working towards the creation of a buffer stock of such materials to protect themselves against such issues.
