Trump Tariff Tantrum Fallout: Maruti Suzuki Slashes E-Vitara Output Amid Chinese Rare-Earth Squeeze

Published: Wednesday, June 11, 2025, 17:12 [IST]

Maruti Suzuki has hit the brakes on its early production of the e-Vitara electric SUV, cutting planned volumes for the April-September period by nearly two-thirds.

The reason? A worldwide pinch on rare-earth materials, caused by US President Donald Trump's heavy-handed reciprocal tariffs on China. These Trump tariffs in turn saw the Communist nation limit access to rare earth minerals vital for the magnets inside EV motors.

Production Plan Gets a Reality Check

In internal planning documents accessed by Reuters, Maruti Suzuki has swapped its optimistic figures for a more conservative forecast. Originally, the nation's largest carmaker had aimed to roll out around 26,500 units in the first half of FY2025/26 but its revised schedule now targets only about 8,200 cars.

However, Maruti Suzuki intends to make up ground later. From October 2025 through March 2026, production is slated to jump to roughly 58,700 units-up from an earlier estimate of about 40,400. In effect, Maruti is deferring much of its electric SUV production to the back half of the financial year, betting that supply constraints will ease by then.

The Rare-Earth Bottleneck

This isn't a hiccup unique to India. China's tighter export rules on rare-earth elements-key ingredients for the powerful permanent-magnet motors used in EVs-have roiled global automakers. Companies in Europe, North America and Japan have scrambled for special permits to keep production lines rolling. Maruti Suzuki, however, is still waiting on sufficient materials to power its e-Vitara assembly. Until those magnets arrive, the e-Vitara factory can't fire on all cylinders.

Stakes for India's EV Drive

Unveiled at January's New Delhi auto show, the e-Vitara was billed as Maruti Suzuki's flagship entrant in the electric mainstream-designed to help India meet its goal of 30% electric-vehicle penetration by 2030.

With Tata Motors and Mahindra & Mahindra already capturing significant EV sales, any lull in Maruti's rollout could hand rivals a lasting edge. Bookings for the e-Vitara haven't even opened yet, leaving potential buyers and dealers in a holding pattern.

Maruti Suzuki's parent company, Suzuki Motor Corporation, has also revised its India strategy, scaling back sales targets for the coming decade and trimming its planned electric portfolio. Suzuki is now expecting to sell 2.5 million cars in India by 2031 instead of its previous sales target of 3 million.

Suzuki has also scaled back its lineup of future EV launches in India to just four, instead of the six it had planned before as competition intensifies in India and with more players like Tesla set to enter the market soon.

Despite the setback, Maruti remains upbeat. Company executives still expect to meet the overall annual target of 67,000 EVs -so long as the magnet shortage resolves and production ramps back up in the latter half of fiscal 2025-26.

Thoughts About Maruti Suzuki's e-Vitara Slowdown

Maruti Suzuki's choice to dial back early production of its first electric SUV has nudged the e-Vitara's debut into the back half of this financial year-proof that even a small snag in the supply chain can trip up even the biggest names in the business.

Hopefully, Maruti Suzuki and other Indian carmakers will be able to get through the current roadblocks to secure their short-term EV futures. However, they will need to ensure that alternatives are available later on to ensure that mid to long-term EV production is not bottlenecked again.