What’s Happening?

China has curbed exports of rare earth materials, especially rare earth magnets, which are crucial for manufacturing electric vehicle (EV) parts like motors.

Impact on Indian Auto Stocks

Nifty Auto index fell 1.6% in 5 days, down 5% over the past year.

Key losers: Maruti Suzuki, M&M, Bharat Forge, Ashok Leyland, Samvardhana Motherson, among others.

Why It Matters

Rare earth magnets, though small and inexpensive, are essential for EV production.

Indian EV manufacturers are directly dependent on imports from China.

Any disruption beyond a month can:

Delay EV launches

Slow production

Affect sector growth

Who’s Hit the Hardest?

Maruti Suzuki

Slashed e-Vitara EV production target by ~67% for April–September 2025.

🏍️ Bajaj Auto

CEO warns: "Indian EV industry could grind to a halt in weeks."

TVS Motor

Says EV production could stop temporarily.

Sona Comstar

First Indian company whose import request for rare earth magnets was rejected by China.

Expert Insight

“The growing backlog and 45-day clearance delays are tightening global EV supply chains,” – CRISIL

Upcoming EV Launches at Risk

Kia Carens Clavis EV

Tata Harrier EV

Mahindra XEV 4e

OLA Roadster X (bike)

India’s ambitious EV goals face a critical short-term threat due to reliance on Chinese rare earth materials. Automakers may need to diversify supply chains or face production and revenue setbacks.