Maruti Suzuki has scaled back production plans for its E-Vitara electric vehicle, impacting the initial half of the 2025-26 fiscal year. Internal reports indicate that the company aims to produce only about 8,221 units between April and September 2025, a substantial reduction compared to the intended target of approximately 26,512 units. The primary factor behind this adjustment is the global scarcity of rare earth metals.
The restrictions imposed by China on rare earth exports have limited access to essential components, such as the magnets required for electric vehicle production. While manufacturers in the US, Europe, and Japan have successfully secured new licenses, their counterparts in India are still awaiting similar approvals.
Suzuki intends to compensate for the reduced production by increasing its output during the latter half of the fiscal year. Furthermore, discussions between China and the EU regarding price commitments for Chinese-made vehicles exported to the EU are nearing their conclusion, as revealed by recent reports.
The issue has been a topic of discussion between Chinese commerce Minister Wang Wentao and EU trade Commissioner Marcos Sefcovic. In April, China’s move to halt exports of various rare earths and related magnets has significantly affected automakers across Europe. The decision is indicative of China’s influence on the global supply chain.
This issue extends beyond the automotive sector, affecting the worldwide supply chains of EV battery components. Aerospace manufacturers, semiconductor companies, and military contractors globally are encountering comparable obstacles. China produces a significant majority of the world’s rare earth minerals. Mercedes Benz is actively working to establish a buffer stock of these materials to minimize the impact.