India’s Auto Sector Faces Rare Earth Magnet Crunch—EV Production at Risk!

Image Source: ET Goverment

India’s automotive industry is grappling with a rare earth magnet shortage, threatening production schedules and growth trajectories. With automakers holding just 46 weeks of inventory, supplychain disruptions could halt EV production by July, forcing deferrals and rescheduling across the sector.

Key Highlights:

Inventory Concerns: Most automakers, including Maruti Suzuki and Bajaj Auto, have limited rare earth magnet stock, raising fears of production slowdowns.
China’s Export Curbs: Since April 2025, China has imposed strict licensing rules on rare earth magnet exports, disrupting global supply chains.
EV Production Delays: Bajaj Auto has warned that EV models could face deferrals if supply constraints persist beyond July 2025.
Government Intervention: Industry leaders are urging the Indian government to expedite approvals for rare earth imports, but bureaucratic hurdles remain.
Market Impact: Analysts predict slower auto sector growth, with high inventory levels and financing challenges adding to concerns.