Maruti Suzuki has reduced its production targets for the e-Vitara electric vehicle by two-thirds due to shortages of rare earth materials.

The Indian automaker now plans to produce approximately 8,200 e-Vitaras between April and September 2025, down from an original goal of 26,500 vehicles.

Despite this reduction, Maruti aims to meet its annual target of producing 67,000 electric vehicles (EVs) by March 2026 by increasing output later in the fiscal year.

Rare earths are essential for manufacturing components like magnets used in electric vehicles.

China’s restrictions on rare earth exports have disrupted global supply chains.

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🔗 Source: Reuters

🧠 Food for thought

1️⃣ China’s rare earth dominance creates a critical vulnerability in global EV transition

The e-Vitara’s production cuts highlight a fundamental supply chain vulnerability for the entire auto industry transitioning to electric vehicles.

China controls approximately 95% of global rare earth production, creating a bottleneck that affects manufacturers worldwide when export restrictions are imposed 1.

Despite their name, rare earth elements aren’t actually scarce in the Earth’s crust, but they’re difficult and expensive to extract because they’re not found in concentrated deposits 1.

The extraction process involves multiple complex stages of mining and chemical processing that few countries have mastered, extending beyond simple resource availability to specialized manufacturing capabilities 2.

Current global demand for rare earths already exceeds production (134,000 tons vs. 124,000 tons annually), creating an ongoing supply deficit that will likely intensify as EV adoption accelerates 1.

This shortage demonstrates how geopolitical factors can directly impact manufacturing timelines, with Maruti’s two-thirds production cut representing just one visible example of a widespread industry challenge 3.

2️⃣ India’s EV market undergoing dramatic competitive realignment

Maruti’s EV production challenges come at a particularly critical moment as India’s electric vehicle market experiences significant competitive shifts.

Tata Motors, long the dominant EV player in India, has seen its market share decline from over 80% to just 35.4% in May 2025, while competitors like MG Motor (30.6%) and Mahindra (21.3%) have gained substantial ground 4, 5.

The overall Indian EV market grew 52% year-on-year in May 2025, reaching 12,197 units and demonstrating the accelerating transition that Maruti risks missing with production delays 5.

Maruti’s broader market position has already eroded from 51% to 41% of India’s passenger vehicle market since 2020, making the e-Vitara launch especially crucial for stemming further losses 3.

The e-Vitara is not just important for India’s domestic market. Most units are earmarked for export to Suzuki’s major markets in Europe and Japan, meaning production delays impact Maruti’s global strategy 6.

With EV penetration in India’s four-wheeler segment increasing from 3.5% to 4.1% month-on-month, and the government targeting 30% EV sales by 2030, the timing of Maruti’s production slowdown could have long-term market share implications 7.

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