Maruti Suzuki sees no immediate impact of Chinese magnet curbs, says govt ‘receptive & supportive'

Indian Express

2 days ago

Maruti Suzuki, the country's largest carmaker, said that there was no immediate impact of China's restrictions on rare earth magnets, and that the industry was in discussion with the government on the matter, which has been 'receptive' and 'supportive'.
The Indian Express had earlier reported that automakers, particularly electric vehicle makers, were staring at potential shortages as China placed export curbs on rare earth magnets and related materials, as a direct response to US imposing tariffs that kicked in from April 4.
'The industry is in discussion with the government and the government is quite receptive and supportive,' Rahul Bharti, senior executive director, corporate affairs, told reporters Monday. 'It is not a restriction, it is an endorsement of end use, and until the time we have any response to our applications, it is difficult to say anything,' Bharti added.
Asked whether companies were looking at sourcing rare earth magnets from alternate regions, Bharti said: 'That's a larger question that will need more deliberation and more studies. Where are other sources available?'
While the Chinese government has not imposed an outright ban on the export of rare earth magnets—a crucial element in making EVs—the process has been made very difficult causing protracted delays and posing shortage risks.
Rare earth magnets, especially neodymium-iron-boron (NdFeB) magnets, are crucial for EV manufacturing, particularly in electric motors. They provide the strong magnetic fields needed for efficient and powerful electric motors, including traction motors that drive EVs. These magnets also play a major role in other EV components like power steering systems, wiper motors, and braking systems. China has a near monopoly over these rare earth magnets.
Importers are now required to give their Chinese suppliers an undertaking that the rare earth magnets procured from that country would only be used in vehicles and not for defence or military applications.
'What's making the process more cumbersome is that the Chinese side is also insisting that local governments issue an endorsement for their importers. In our case, that would be the Director General of Foreign Trade (DGFT), which will have to endorse each importer separately. A separate authorisation must also be sought from the Chinese Embassy,' a senior industry executive had said earlier. 'We are talking to the government about how the process can be made better, because it is clear that the industry would need their help.'
Over the past month or so, Indian carmakers are learnt to have used up inventories and the shortage is likely going forward.
Worrying still is a fresh insistence from Beijing that instead of sourcing magnets separately, carmakers buy entire electric motor assemblies from Chinese companies, or simply wait for the Chinese authorities to issue export permits to local rare earth magnet producers, as has been done, according to Reuters, for at least four magnet producers that include suppliers to Volkswagen – the first granted since Beijing restricted shipments last month.
The German carmaker is said to have lobbied hard with Beijing to get this done.
The problem with sourcing entire motors, as against just the magnets in them, is that carmakers would have to redesign their cars to accommodate the entire motor assembly, which comes in standard sizes. The ability to import magnets meant that manufacturers could calibrate the motor sizes to the design of their vehicles.
While the availability of rare earth metals is not limited to China, it is in the efficient processing of these critical elements where Beijing has a substantial lead, which was once enjoyed by the US and Japan.
In recent years, Japan has been able to restart some of its minerals' processing industry owing to government policies, but countries like the US and India are heavily dependent on Chinese exports of these metals.
In response to the US administration's reciprocal tariff heat, China restricted exports of seven heavy rare earth metals including samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium, as well as rare earth magnets,
Earlier, it had also banned exports to the US of gallium, germanium, antimony, and other key high-tech materials with potential military applications.
Soumyarendra Barik is Special Correspondent with The Indian Express and reports on the intersection of technology, policy and society. With over five years of newsroom experience, he has reported on issues of gig workers' rights, privacy, India's prevalent digital divide and a range of other policy interventions that impact big tech companies. He once also tailed a food delivery worker for over 12 hours to quantify the amount of money they make, and the pain they go through while doing so. In his free time, he likes to nerd about watches, Formula 1 and football. ... Read More