Rare earth shortage forces Maruti Suzuki to slash e-Vitara production targets by two-thirds

Time of India

2 days ago

Maruti Suzuki, India's largest carmaker, has sharply cut its near-term production targets for its first electric vehicle, the e-Vitara, amid a global rare earth supply crunch triggered by China's export restrictions, a company document seen by
Reuters
has revealed.
The automaker now plans to produce just 8,221 e-Vitaras between April and September 2025, down from its initial target of 26,512 units—a reduction of nearly two-thirds. The document cites "supply constraints" in rare earth materials, which are crucial for EV components like magnets used in electric motors.
China's Curbs Ripple Across Auto Industry
China's tightening of rare earth exports—vital for high-tech industries—has rattled automakers globally. While firms in the US, Europe, and Japan are beginning to secure export licenses from Beijing, Indian manufacturers are still awaiting approvals, raising concerns of further production delays.
The setback comes despite Maruti's public stance that production has not yet been impacted. Company chairman R.C. Bhargava recently told local media there was 'no impact at the moment' on manufacturing timelines. Maruti also said last week that the rare earths issue had no 'material impact' on the e-Vitara's launch.
EV push faces roadblocks amid rising competition
Launched with much fanfare at India's Auto Expo in January 2025, the e-Vitara is a flagship product in Maruti's long-awaited electric mobility push. It is expected to play a pivotal role as India targets 30 per cent EV penetration by 2030—up from just 2.5 per cent last year.
However, production delays and a lack of booking announcements have raised eyebrows. Analysts warn that Maruti is already behind the curve, especially as rivals Tata Motors and Mahindra & Mahindra gain ground with feature-rich EVs. US electric vehicle giant Tesla is also gearing up to enter the Indian market this year.
Maruti's share in India's passenger vehicle market has slipped to 41 per cent, down from 51 per cent in March 2020, as it struggles to regain ground in the booming SUV and EV segments.
Revised Roadmap: Catch-Up in H2 FY26
While cutting near-term production, Maruti aims to ramp up output in the second half of FY26 to 58,728 units, compared to a previous target of 40,437. This would mean producing around 440 e-Vitaras per day at peak capacity. The company still intends to meet its full-year EV production target of 67,000 units by March 2026.
Two supply chain sources confirmed that rare earth magnet shortages had forced Maruti to alter production plans, though they were not aware of the exact figures.
Global stakes for Suzuki
The e-Vitara is also a critical product for parent company Suzuki Motor Corp., which relies on India as its largest revenue market and a key manufacturing hub. A significant share of the e-Vitara output is earmarked for exports to Europe and Japan beginning mid-2025.
As competition heats up in India, Suzuki has revised its broader strategy—trimming its India sales target from 3 million to 2.5 million vehicles by FY31, and scaling down its EV rollout from six to four models, reflecting the challenges ahead in an increasingly competitive EV landscape.