Maruti Suzuki, has dramatically reduced its near-term production targets for the e-Vitara electric SUV by two-thirds due to a critical shortage of rare earth materials, signaling fresh challenges for the global EV industry. The news, reported by Reuters, reveals the company now plans to produce about 8,200 e-Vitaras between April and September 2025, down from an initial goal of 26,512 units. This setback comes as China‘s export restrictions on rare earths, vital for EV magnets, continue to disrupt supply chains worldwide, leaving Indian automakers scrambling to adapt.

Technical Impact on e-Vitara Production

The e-Vitara, unveiled with much fanfare at India‘s auto show in New Delhi in January 2025, relies on rare earth elements to power its electric motors and other high-tech components. The company aims to recover lost ground later, targeting 67,000 EVs by March 2026 by ramping up output in subsequent months.

This adjustment includes producing up to 58,728 e-Vitaras—or about 440 vehicles per day at peak—between October 2025 and March 2026, a shift from an earlier target of 40,437 units. The reduction highlights the technical challenge of securing consistent rare earth supplies, particularly as India awaits China’s approval for imports amid ongoing global shortages.

Maruti Suzuki Slashes E-Vitara Ev Production By Two-Thirds Amid Rare Earth Crisis

Industry Trends and Competitive Pressure

China’s curbs on rare earth exports have rattled the global auto industry, with companies in the Verenigde Staten, Europa, and Japan seeing eased supplies after securing Beijing’s licenses. However, India lags behind, facing potential production stoppages. This crisis compounds Maruti’s struggle to regain market share lost to competitors like Tata Motors en Mahindra & Mahindra, which lead India’s EV sales.

Maruti’s passenger vehicle market share has slipped to 41% from a high of 51% in March 2020. Additionally, Suzuki has lowered its India sales target to 2.5 million vehicles by March 2031, down from 3 million, reflecting intensified competition in the South Asian nation. The e-Vitara’s export potential—earmarked for markets like Europe and Japan starting summer 2025—adds urgency, with each unit valued at approximately $25,000 USD based on industry estimates.

Economic and Regulatory Implications

The rare earth shortage has already impacted Maruti’s stock, with shares on the Indian exchange dropping 1.4% to the day’s low following the announcement.

Chairman RC Bhargava told reporters last week, “the rare earths issue had no ‘material impact’ on the e-Vitara’s launch timeline,” and on Monday, he added, “there was ‘no impact at the moment’ on production,” according to local media cited by Reuters.

However, the revised production plan suggests otherwise, indicating a two-thirds cut in the first half of the fiscal year. Analysts warn Maruti’s delay in launching EVs, with bookings set to open soon, puts it at a disadvantage in India’s third-largest car market, where Tesla plans to enter this year. The company’s parent, Suzuki Motor, faces added pressure as India remains its biggest revenue market, with the e-Vitara’s rollout critical to meeting Prime Minister Narendra Modi’s goal of growing EV sales to 30% of all cars by 2030, up from 2.5% last year.

This evolving situation underscores the delicate balance between technological innovation, supply chain resilience, and economic strategy in the EV sector, with Maruti Suzuki’s adjustments serving as a bellwether for the industry’s response to global material constraints.

Photos courtesy of Suzuki.