Maruti Suzuki Slashes e-Vitara EV Production by Two-Thirds Due to Rare Earths Crisis
India's largest automaker Maruti Suzuki has significantly reduced its near-term production targets for its flagship electric vehicle, the e-Vitara SUV, due to severe shortages of rare earth materials. This dramatic production cut highlights the growing impact of China's export restrictions on the global automotive industry and poses challenges for India's ambitious electric vehicle adoption goals.
Massive Production Reduction in First Half of Fiscal Year
According to internal company documents, Maruti Suzuki has slashed its e-Vitara production target for the first half of fiscal year 2025-26 by an unprecedented two-thirds. The company now plans to manufacture approximately 8,200 e-Vitara units between April and September 2025, down from its original ambitious target of 26,500 units for the same period.
This dramatic reduction stems from what the company describes as "supply constraints" in rare earth materials, which are essential components for manufacturing magnets and other critical parts used in electric vehicle motors and batteries.
Company Strategy to Meet Annual Targets
Despite the significant first-half production cuts, Maruti Suzuki remains committed to achieving its full-year target of 67,000 e-Vitara units by March 2026. The company plans to compensate for the reduced early production by dramatically ramping up manufacturing in the second half of the fiscal year.
Under the revised production schedule, Maruti intends to manufacture 58,728 e-Vitara units between October 2025 and March 2026, representing approximately 440 units per day at peak production capacity. This represents a substantial increase from the originally planned 40,437 units for the same six-month period.
China's Rare Earth Export Restrictions Impact
The production challenges facing Maruti Suzuki reflect the broader disruption caused by China's restrictions on rare earth exports. These materials are crucial for manufacturing high-performance magnets used in electric vehicle motors, and China controls a significant portion of global rare earth supply chains.
While some companies in the United States, Europe, and Japan have begun securing necessary licenses from Beijing to resume imports, Indian manufacturers are still awaiting approval. This has created particular challenges for India's automotive sector, which is working to rapidly scale up electric vehicle production.
Strategic Importance of e-Vitara for Maruti's EV Ambitions
The e-Vitara represents Maruti Suzuki's first major entry into India's electric vehicle market and is crucial to the company's long-term strategy. Launched with considerable fanfare at India's automotive show in January 2025, the e-Vitara is designed to help Maruti capture market share in the rapidly growing EV segment.
Prime Minister Narendra Modi's government has set an ambitious target for electric vehicles to represent 30% of all car sales by 2030, up from approximately 2.5% in 2024. The e-Vitara's success is critical for Maruti to maintain its market leadership position as the automotive industry transitions toward electrification.
Impact on Parent Company Suzuki Motor
The production setbacks also have significant implications for Japan's Suzuki Motor, for which India represents the largest market by revenue and serves as a global production hub for electric vehicles. The company had planned to export the majority of India-manufactured e-Vitara units to major markets including Europe and Japan beginning in summer 2025.
This export strategy is now potentially at risk due to the production delays, which could affect Suzuki's global EV rollout timeline and competitive positioning in international markets.
Market Competition and Share Pressures
The rare earth crisis comes at a challenging time for Maruti Suzuki, which has been losing market share to competitors like Tata Motors and Mahindra & Mahindra. These companies have gained ground with feature-rich SUVs and currently lead India's electric vehicle sales.
Maruti's share of India's passenger vehicle market has declined to 41% from a recent peak of approximately 51% in March 2020. The delayed e-Vitara launch could further impact the company's ability to regain market share in the crucial SUV and EV segments.
Revised Sales Targets and Future Plans
The challenges have prompted Suzuki to scale back its overall ambitions for the Indian market. The company has reduced its sales target for India to 2.5 million vehicles by March 2031 from a previous target of 3 million vehicles.
Additionally, Suzuki has trimmed its planned EV lineup for India from six models to just four, reflecting the intensifying competition and operational challenges in the South Asian market.
Market analysts note that Maruti is already considered late to launch EVs in the world's third-largest car market, where even Tesla is expected to begin sales this year. The production delays could further extend this timing disadvantage in the rapidly evolving electric vehicle landscape.
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