China Rare-Earth Export Curbs Threaten Global Auto Production

China's recent export restrictions on rare earth magnets, essential for electric and conventional vehicle components, have raised concerns among global and Indian automakers about potential supply chain disruptions. While Maruti Suzuki does not currently expect any impact on the launch of its first EV, e Vitara, other Indian manufacturers like Bajaj Auto and TVS Motor have expressed worries about production slowdowns due to delayed shipments and depleted inventory. Globally, major automakers including General Motors, Toyota, Volkswagen, and Hyundai have warned U.S. authorities that a shortage of these magnets could lead to reduced production volumes or even shutdowns of vehicle assembly lines. The magnets are critical for various automotive parts such as motors, sensors, alternators, and power steering, and China controls over 90% of the global processing capacity. Industry groups have urged government intervention and are exploring alternative sourcing and domestic production to mitigate risks. The situation remains fluid, with high-level discussions ongoing between governments and stakeholders to prevent severe supply chain disruptions.