Maruti Suzuki Cuts EV Manufacturing Target Amid Rare Earth Scarcity

June 11, 2025

Prime Highlights:

Maruti Suzuki cuts near-term EV manufacturing in response to a worldwide lack of rare earth affecting EV parts.
April–September 2025 manufacturing target reduced by 26,500 units to a mere 8,200 e-Vitaras.

Key Facts:

China’s rare earth export bans have set off a worldwide supply chain choke point for EV components.
Maruti intends to step up production in the second half of the financial year to achieve its target for the year.
The company wants to make more than 58,000 e-Vitaras between October and March despite the initial hiccups.

Key Background:

Maruti Suzuki, India’s leading car maker, has cut back sharply on the production of its first electric SUV, the e-Vitara. The move comes on account of a persistent global shortage of rare earth materials, critical elements used in electric vehicle magnets. The company has cut its initial production target of 26,500 units for the first half of the financial year (April to September 2025) to a mere 8,200 units, due to material supply constraints.

This rare earth crisis resulted from recent Chinese restrictions, the world’s leading supplier and processor of these precious minerals. The action has caused a shockwave through the global automotive industry, with production giants like Maruti struggling to cope with critical material shortages. With more than 90% of rare earth processing in China, the ripple effect extends far and wide, even to companies with earlier contracted supply chains.

In spite of the short-term dip in production, Maruti Suzuki is positive it will meet its full-year EV goal. The automaker is scheduled to sharply raise production in the second half of the financial year with a view to producing around 58,728 vehicles between October 2025 and March 2026. The move is intended to facilitate it still meeting its annual production goal of 67,000 units. Based on this new plan, daily production could increase to as much as 440 vehicles.

However, this disruption comes at a challenging time for Maruti. The company has seen its market share decline significantly over recent years, dropping from 51% in 2020 to about 41% now. Meanwhile, competitors like Tata Motors and Mahindra have gained traction in the EV market with more competitive offerings. In response, Maruti’s parent company, Suzuki Motor Corporation, has reduced its long-term sales target for India and scaled back its planned EV model launches.

On the policy side, the Indian government is going full steam to address the supply chain congestion. Delegations will be meeting with Chinese officials to fast-track approvals and domestic efforts to process rare earth are being expedited. Nevertheless, the present slowdown highlights India’s overdependence on foreign suppliers for its electric vehicle shift.