NEW DELHI — Maruti Suzuki has cut near-term production targets for its maiden electric vehicle, the e-Vitara, by two-thirds because of a shortage of rare earths in the latest sign of disruption to the auto industry from China’s export curbs.
India’s top carmaker, which said on Monday it had not seen any impact yet from the supply crisis, now plans to make about 8,200 e-Vitaras between April and September well below an original goal of 26,500, according to a company document.
The document cited “supply constraints” in rare earth materials that are vital in making magnets and other components across a range of hi-tech industries.
Maruti still plans to meet its output target of 67,000 EVs for the year ending March 2026 by increasing production in subsequent months, the document states.
Approval awaited
China’s curbs on some rare earth exports have rocked the global auto industry, with companies warning of severe supply chain disruptions. While some companies in the US, Europe and Japan are seeing supplies easing as they secure licences from Beijing, India is still waiting for China’s approval amid fears of production stoppages.
Launched amid much fanfare at India’s car show in January, the e-Vitara is crucial to Maruti’s EV push in the country, marking its entry in a segment that Prime Minister Narendra Modi’s government wants to grow to 30% of all car sales by 2030 from about 2.5% last year.
The setback could also hurt parent Suzuki Motor Corp., for which India is the biggest market by revenue and a global production hub for EVs. The bulk of the made-in-India e-Vitaras are earmarked for export to Suzuki’s major markets — Europe and Japan — over the coming months.
Maruti told reporters last week the rare earths issue had no “material impact” on the e-Vitara’s launch timeline. Chair RC Bhargava said there was “no impact at the moment” on production, local media reported on Monday.
Maruti and Suzuki did not respond to requests for comment on Tuesday.
Double blow
Maruti shares fell as much as 1.4% to the day’s low on the Indian stock exchange after the news.
Maruti is yet to open bookings for the e-Vitara and some analysts have warned it is already late to launch EVs in the world’s third-largest car market where Tesla is also expected to start sales this year.
Under its previous plan, Maruti was to produce 26,512 e-Vitaras between April and September — the first half of the fiscal year. The revised plan calls for 8,221, according to the document.
However, in the second half of the financial year — from October to end-March 2026 — Maruti plans to ramp up production to 58,728 e-Vitaras, or about 440 a day at its peak compared to a previous target of 40,437.
Two supply chain sources confirmed Maruti’s plan to scale back e-Vitara production because of rare earth magnet shortages but were not privy to the exact numbers.
The rare earths crisis comes as Maruti is already grappling to recover market share lost to Tata Motors and Mahindra & Mahindra’s feature-rich SUVs. These companies also lead India’s EV sales. Maruti’s share of India's passenger vehicle market is down to 41% from a peak of about 51% in March 2020.
Suzuki has trimmed its sales target for India to 2.5-million vehicles by March 2031 from 3-million previously, and scaled back its line-up of EV launches to four from six as competition in the South Asian nation intensifies.
Reuters
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