China's rare earth curbs threaten EV Plans, drag down Maruti, Tata Motors, and auto stocks
What's Happening?
China has curbed exports of rare earth materials, especially rare earth magnets, which are crucial for manufacturing electric vehicle (EV) parts like motors.
Impact on Indian Auto Stocks
Nifty Auto index fell 1.6% in 5 days, down 5% over the past year.
Key losers: Maruti Suzuki, M&M, Bharat Forge, Ashok Leyland, Samvardhana Motherson, among others.
Why It Matters
Rare earth magnets, though small and inexpensive, are essential for EV production.
Indian EV manufacturers are directly dependent on imports from China.
Any disruption beyond a month can:
Delay EV launches
Slow production
Affect sector growth
Who's Hit the Hardest?
Maruti Suzuki
Slashed e-Vitara EV production target by ~67% for April–September 2025.
🏍️ Bajaj Auto
CEO warns: "Indian EV industry could grind to a halt in weeks."
TVS Motor
Says EV production could stop temporarily.
Sona Comstar
First Indian company whose import request for rare earth magnets was rejected by China.
Expert Insight
'The growing backlog and 45-day clearance delays are tightening global EV supply chains,' – CRISIL
Upcoming EV Launches at Risk
Kia Carens Clavis EV
Tata Harrier EV
Mahindra XEV 4e
OLA Roadster X (bike)
India's ambitious EV goals face a critical short-term threat due to reliance on Chinese rare earth materials. Automakers may need to diversify supply chains or face production and revenue setbacks.
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