Maruti Suzuki cuts short-term EV production amid rare earths crisis

Maruti Suzuki has cut short-term production targets for its maiden electric vehicle (EV) e-Vitara by two-thirds because of rare earths shortages, a document showed, in the latest sign of disruption to the car industry from China's export curbs.

India's top carmaker, which said on Monday it had not seen any effect yet from the supply crisis, now plans to make about 8,200 e-Vitaras between April and September, vs an original goal of 26,500, according to a company document seen by Reuters.

It cited “supply constraints” in rare earth materials 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 ramping up production in subsequent months, the document said.

China's curbs on some rare earth exports have rocked the global car 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 Prime Minister Narendra Modi's government wants to grow to 30% of car sales by 2030 from about 2.5% last year.

The setback could also hurt parent Suzuki Motor, for which India is the biggest market by revenue and a global production hub for EVs. Most of the made in India e-Vitaras are earmarked for export by Suzuki to its major markets such as Europe and Japan in summer 2025.

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, media reported on Monday.

Maruti and Suzuki did not immediately respond to requests for comment on Tuesday.

Maruti is yet to open bookings for the e-Vitara with some analysts warning it is already late to launch EVs in the world's third-largest car market where Tesla is also expected to begin sales this year.

Under its previous plan “A”, Maruti was to produce 26,512 e-Vitaras between April and September — the first half of the fiscal year. Under the revised plan “B”, it will manufacture 8,221, the document showed, indicating a two-thirds cut in its production schedule.

However, in the second half of the financial year — between October and March 2026 — Maruti plans to ramp up production to 58,728 e-Vitaras, or about 440 per day at its peak, vs a previous target of 40,437 for those six months under plan A.

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 numbers.

The rare earths crisis comes as Maruti is grappling to recover market share lost to Tata and 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 recent 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, instead of the six planned before, as competition in the South Asian nation intensifies.