Maruti Suzuki is adjusting its production strategy for the upcoming E-Vitara electric vehicle, primarily for the first half of the 2025-26 fiscal year. Internal company documents suggest that the automaker plans to manufacture approximately 8,221 units between April and September 2025, a significant decrease from the initial target of about 26,512 units. The primary cause of this production cut is the ongoing scarcity of rare earth metals.
China’s export restrictions on rare earth minerals have led to shortages of critical components, including the magnets essential for EV production. While manufacturers in the US, Europe, and Japan have obtained new licenses, Indian manufacturers are still awaiting similar approvals.
Suzuki plans to make up for the reduced production volume by increasing its manufacturing output during the second half of the year. Simultaneously, discussions between China and the EU regarding price commitments for Chinese-made vehicles exported to the EU are reportedly in their final stages.
The subject has been discussed between Chinese commerce Minister Wang Wentao and EU trade Commissioner Marcos Sefcovic in Paris. In April, China’s decision to suspend exports of a wide range of rare earths and related magnets has caused issues for automakers across Europe. This highlights China’s strategic position within global supply chains.
The implications extend beyond the automotive industry, impacting global supply chains for EV battery components. Similar issues are being faced by aerospace manufacturers, semiconductor companies, and military contractors worldwide. China dominates the production of rare earth minerals, manufacturing about 90% of the world’s supply. Companies like Mercedes Benz are working to build a buffer stock of these materials.