Maruti Suzuki is curtailing production of its forthcoming E-Vitara electric vehicle, specifically for the initial six months of the 2025-26 fiscal year, due to supply chain issues related to rare earth metals. Internal documents suggest that the company projects a production volume of approximately 8,221 units between April and September 2025, which is roughly two-thirds less than the initial goal of around 26,512 units.
The primary driver of this production adjustment is the scarcity of essential materials. China’s export restrictions on rare earth elements have hampered the availability of critical components, including the magnets vital for electric vehicle manufacturing. Although manufacturers in the US, Europe, and Japan have obtained new licenses, Indian manufacturers are still awaiting similar approvals.
Suzuki is planning to mitigate the production deficit by accelerating its output in the latter half of the year. Concurrently, China and the EU are engaged in advanced discussions concerning price commitments for Chinese-made vehicles destined for the EU market.
The matter has been under discussion between Chinese commerce Minister Wang Wentao and EU trade Commissioner Marcos Sefcovic in Paris. In April, China’s decision to halt exports of a broad spectrum of rare earth elements and related magnets has created problems for automakers across Europe. This situation is impacting the automotive industry and has broader implications for other sectors.
Beyond the automotive industry, the suspension of rare earth exports by China has disrupted global supply chains for EV battery components. Aerospace manufacturers, semiconductor firms, and defense contractors are also facing similar difficulties. China produces around 90% of the world’s rare earth minerals. Companies like Mercedes Benz are working on securing a buffer stock of materials to mitigate the impact.