China’s stricter export controls on rare earth elements have raised concerns in India’s automotive sector, especially among electric vehicle (EV) makers. Industry executives said that current stockpiles of these critical metals may last only up to a few days, and delayed shipments could disrupt operations.
Bajaj Auto’s Executive Director Rakesh Sharma said on Thursday that the shortage of rare earth magnets could significantly impact the company’s production plans by July 2025. “As we speak, supplies and stocks are getting depleted. And if there is no relief and there are no shipments, then July production will get seriously impaired,” stated Sharma.
A Bengaluru-based EV startup founder, speaking anonymously, warned of acute shortages of elements like terbium, lutetium, and scandium. “Without alternatives, some manufacturers may have to halt production in the next few weeks,” they said. A senior executive at a car company noted that 85-95% of these materials come from China, leaving few viable suppliers. “This is a critical issue requiring urgent government action,” he added, also requesting anonymity.
Leveraging its mineral dominance for geopolitical influence, China has restricted exports of vital rare earths, including EV magnet components. These elements are essential for power steering, electric windows, and high-efficiency motors, making them indispensable for automakers.
The move has unsettled India’s auto industry, which already depends heavily on Chinese imports for EV batteries and parts. India isn’t alone in this struggle. The U.S. and EU also rely on China, which controls nearly the entire supply chain of these materials. Currently, China supplies 85-95% of the world’s rare earth metals, cementing its grip on advanced industries.
In a meeting with commerce ministry officials last week, India’s auto lobbying body - Society of Indian Automobile Manufacturers (SIAM)- said inventories at auto part makers are expected to run out by
the end of May. As per a Reuters report, SIAM was seeking the intervention of Prime Minister Narendra Modi’s government to help access magnets held at Chinese ports since April 4.
“Starting end May or early June, auto industry production is expected to come to a grinding halt,” SIAM said in the document, which was presented during a May 19 meeting attended by executives from Maruti Suzuki, Mahindra & Mahindra and Tata Motors.