India’s biggest car company, Maruti Suzuki, is reducing production of its first electric SUV, the e-Vitara, because of a shortage of rare earth materials. These materials are important for making magnets used in electric motors.
What’s Happening?
- Maruti planned to make 26,500 e-Vitara units between April and September 2025, but due to supply issues, it will now make only 8,200 units — a two-thirds drop.
- The company still hopes to reach its full-year target of 67,000 EVs by increasing production later in the year (October to March).
- The problem comes from China’s export restrictions on rare earth materials, which has affected car companies around the world.
- While companies in the US, Europe, and Japan are starting to get supplies, Indian companies are still waiting.
Why This Matters
- The e-Vitara is very important for Maruti’s electric vehicle plans. It was launched in January 2025 with much excitement.
- Most of the cars made in India are meant for export to Europe and Japan starting this summer.
- This delay might affect Maruti’s future growth in EVs, especially as rivals like Tata and Mahindra are already leading in India’s electric car market.
- Maruti’s market share has dropped from 51% in 2020 to 41% now.
Other Key Points
- Maruti’s shares dropped by 1.4% after the news came out.
- The company hasn’t opened bookings yet for the e-Vitara.
- Suzuki, Maruti’s parent company, has also lowered its India sales target and reduced its future EV plans due to strong competition.
