Rare-earth squeeze: Choked supply chains force automakers to explore alternatives

AHEAD OF THE first quarter results, all eyes were on the rare-earth element supply runways of automotive companies. As China continued its blockade, it was widely expected that the impact of the clampdown would become clearer as manufacturers’ stock of rare-earth elements begin to run out.

Maruti Suzuki was among the first auto firms where the impact of the rare-earth magnet supply crunch was becoming palpable as the launch of e VITARA, its first battery electric vehicle (BEV), fast approached. Reports suggested that India’s largest passenger vehicles maker pruned e VITARA’s production by two-thirds to 8,221 units from its original target of 26,512. However, the company denied this. “(MSIL) has so far managed to ensure that no production was lost due to a shortage of magnets,” R.C. Bhargava, chairman, Maruti Suzuki, stated in the FY25 annual report.