India’s electric car industry is facing a serious crisis as China tightens its supply of rare earths, essential for making permanent magnets for electric motors, in a direct blow to the South Asian country’s electrification ambitions.
China currently accounts for the majority of the global rare earth processing market. With Beijing restricting exports of these strategic commodities, many Indian automakers are finding themselves unable to import critical components in time to maintain their production lines.
For example, Maruti Suzuki, the market leader in India, has been forced to significantly cut production of its e-Vitara electric vehicle due to a shortage of motor magnets. Its production plan for the period from April to September 2025 has been reduced from 26,500 to just 8,200, threatening the country’s progress towards its national EV target.
Many other manufacturers are also worried as their stockpiles of supplies will only last until mid-July. If the situation does not improve, the risk of suspending electric and hybrid vehicle production lines is inevitable.
Faced with this pressure, Indian businesses have set up a delegation to negotiate with China, while also calling on the government to support the expansion of domestic production. A number of policies have been drafted, including a financial incentive package to encourage domestic production of rare earth magnets and the import of machinery for the metallurgical industry.
However, experts say building an alternative supply chain is a big challenge and will take a long time. Meanwhile, demand for electric vehicles in India is still growing rapidly, especially in the urban segment.
The current difficulties show that heavy dependence on China is not only an economic risk, but also a strategic security issue. With the rapid development of the electric vehicle industry, India is forced to find a sustainable direction, reduce dependence and promote technological self-reliance if it wants to maintain growth momentum.
Source: https://khoahocdoisong.vn/nganh-xe-dien-an-do-lao-dao-vi-thieu-dat-hiem-post1547565.html
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