Tata Motors eyes rare earth magnet sources, has enough stocks: Chandrasekaran

Mint

5 hours ago

Tata Motors Ltd has enough stock of rare earth magnets, and the company is scouting for new sources amid China's export curbs, Tata Sons chairman Natarajan Chandrasekaran said.
'As of now, we are OK; we are not facing any issues. We are able to source the magnets we need, and are working on securing alternative sources of rare earth magnets,' Chandrasekaran said at the company's 80th annual shareholders' meeting on Friday. 'We are working with the government (on the issue).'
Tata Motors, India's largest automaker by revenue, is among numerous businesses affected by China's export curbs on rare earth magnets, which are critical in automotive, aerospace, and electronics industries. Though the curbs were imposed in April as a trade war between the US and China and flared, the two rivals have since reached a deal. However, exports to India remain blocked, and domestic companies are pushing the government to engage Chinese officials to ease supplies.
Chandrasekaran's comments on the rare earth magnet issue come a day after R.C. Bhargava, chairperson of Maruti Suzuki India Ltd, India's second-largest automaker and largest carmaker, said his company's stocks of rare earth magnets will last until July. On 11 June, Reuters reported that Maruti Suzuki had cut near-term production targets for its maiden electric vehicle e-Vitara by two-thirds because of rare earth shortages. The e-Vitara was expected to launch before September end.
Out of the 54 shareholders who posed questions at Friday's virtual AGM, a fourth referred to rare earth magnets and the situation on the US tariff front. The chairperson also addressed the concerns of shareholders on US tariffs.
'The tariff impact will be primarily on Jaguar-Land Rover. Tariff has gone up from 2.5% to 27.5%, and under the UK-US FTA, the tariff is 10%. The overall impact would have been 1.6 billion pounds. But due to the steps taken by JLR, the impact has gone down to 600 million pounds, which is visible in the margin guidance,' Chandrasekaran told shareholders.
JLR, the British subsidiary of Tata Motors, has trimmed its guidance on revenue growth to 5-7% for FY26 from 10% mentioned earlier. The company attributed the reduction to the impact of the tariffs and the slowdown in the Chinese market.
In an interview with Mint earlier, Shailesh Chandra, managing director at Tata Motors Passenger Vehicles and Tata Passenger Electric Mobility, said that rare earths are required for both internal combustion engine vehicles and electric vehicles.
China said on 4 April that companies seeking rare earth magnets must submit applications with end user certificates to the Chinese embassy, which then go to the provinces from where magnets are sourced. After approval from provincial authorities, the Chinese commerce ministry has to approve the applications. So far, no Indian company has received approval to receive shipments of these critical items.
As per industry estimates, it takes about 45 days to get approval. Bajaj Auto Ltd's executive director Rakesh Sharma said during the company's earnings call on 29 May that the industry will face production cuts starting July if the situation is not resolved.
However, Tata Motors' leadership remains confident that the situation is under control and will likely be resolved.
Chandrasekaran said the Tata Group will continue its investments in the electric vehicle business, and will likely achieve the 30% penetration target in its overall portfolio before 2030.
This was Chandrasekaran's first appearance at a Tata Group company annual general meeting this year. Earlier, he skipped the AGMs of Tata Consumer Products Ltd (TCPL) and Tata Consultancy Services on 18 and 19 June, as top Tata Group officials attended to the crisis over the Air India crash in Ahmedabad on 12 June. The AGMs of TCPL and TCS were presided over by board members P.B. Balaji and Keki Mistry, respectively.
Chandrasekaran also condoled the deaths from the AI accident, and requested the board members and shareholders to observe a minute of silence.
'My thoughts are with family and friends who lost their loved ones and I know, we have the same feeling,' Chandrasekaran said in his opening address. 'This has been a long and unsettling week for all of us as a nation, as a group and at a very human level, navigating a very deep sorrow, grief and uncertainty all at the same time.'
The chairperson also spoke of Ratan Tata, the group's chairman-emeritus who died last October.
'I had the opportunity to constantly share updates with Ratan Tata about the business in the last few years. While we all miss him, I want you to know that he would have been very proud of the turnaround of the business as Tata Motors was very close to his heart,' Chandrasekaran told shareholders.