Amid Rare Earth Crisis, Maruti Suzuki Revises EV Plans
The auto major is aiming to produce around 8,000 units of the model by September, as against the previous plan of rolling out over 26,000 units during the same period
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Maruti Suzuki India has cut near-term production targets for its upcoming electric vehicle e-Vitara because of rare earths shortages, according to Reuters.
The auto major is aiming to produce around 8,000 units of the model by September, as opposed to the earlier plan of rolling out over 26,000 units during the same period. The company however plans to make up for the production slump with a target to produce around 67,000 units of the model by FY26. The e-Vitara is crucial to Maruti's EV plans in the country marking its entry in the segment.
Earlier this week, Maruti Suzuki India Chairman R C Bhargava said there will be no impact on the company's production due to the shortage of rare earth magnets as of now. Domestic carmakers are forced to take steps as the Chinese government has put restrictions since April 4 on the export of rare earth elements and related magnets. China controls over 90 percent of global processing capacity for the magnets, used across sectors.
China's export curbs on some rare earth have shocked the global auto industry, as companies struggle to maintain supply chains. While some companies in the United States, Europe and Japan are seeing ease of supplies after securing licences from Beijing, India is still waiting for China's approval amid fears of shutting down production. The domestic automobile industry has sought government support in seeking approvals from the Chinese government for importing rare earth magnets used in various applications, including passenger cars.
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When Tata bought the airline, one-third of the fleet was grounded and being cannibalized for parts. The airline has since put all but one of those 30 grounded planes back in the sky, spent $200 million to replace 43 IT systems and recruited 6,000 new employees. Buoyed by the addition of Vistara's modern fleet and by deliveries of new aircraft, including six Airbus A350 planes, 50% of Air India's fleet now offers either new or upgraded interiors, Wilson said. Still, there is much work to do. The airline has plans to retrofit 40 widebody aircraft by 2028, and in the meantime it is doing a lighter freshening of 13 Boeing 777s to tide it over while it awaits seat replacement availability. Operationally, Air India is still a laggard. In May, the carrier was on time 71% of the time, placing it in the bottom 15% of global carriers, according to OAG. India aviation ministry records show that for the fiscal year that ended on March 31, Air India was on time just 68% of the time, according to the New Delhi-based magazine BW Businessworld. The airline also continued to suffer net losses in 2024-25 fiscal year, though it did record an operating profit as turnaround efforts progressed, according to Indian media sources. Indian macroeconomics have been behind the Tata Group's investment plans. IndiaNote is set to surpass Japan as the world's fourth-largest economy. And through 2050, growth will average 5.4% annually, according to a forecast by the London-based consultancy the Economist Intelligence Unit. Meanwhile, even though India is the world's biggest country by population, Indian airlines are operating just 69 widebody aircraft, according to Bloomberg Intelligence fleet data -- a figure that is lower than the widebody fleet of Singapore Airlines alone. Lacking the capacity to meet demand, India has largely ceded international air service to foreign operators, especially the Gulf carriers. Indian airlines have just 21% of Indian international market share, Wilson said. Also, while India does have the third-largest domestic airline industry in the world, it's still just one-seventh the size of similarly populous China's, IATA figures show. "If the Indian traveler starts traveling at the same rate as the Chinese travelers, it's going to be enormous," Wilson said at the IATA conference. But, for now, growth ambitions will take a back seat at Air India as it deals with the Flight 171 tragedy. On June 16, the airline's chairman, N. Chandrasekaran, told employees at a company town hall that the tragedy should serve as a catalyst to build a safer airline, various media reported. Investigators could take months to determine the cause of the crash. If mechanical or technical issues with the flight's Boeing 787 Dreamliner or General Electric GENx engine are ultimately found responsible, Air India's reputational damage would be less dramatic than if the airline's own safety protocols failed. But no matter what, Strickland said, the accident dents the carrier's progress. "It's not like the airline was top of the heap in terms of reputation and loyalty from customers," he said. "Whatever the cause, it means that management will have to redouble their focus to prove that they can deliver a safe, reliable and high-quality product."
