Maruti Explores Rare Earth Alternatives as China Tightens Magnet Exports

By Ayesha Verma · June 17, 2025 · Updated: 09:00 IST

When China’s Ministry of Commerce announced new licensing requirements and stricter end‑use disclosures for the export of seven rare earth elements and finished magnets in early June, global automakers braced for impact. Maruti Suzuki, India’s largest carmaker, is now actively exploring alternative sources and technologies to mitigate potential disruptions to its electric vehicle (EV) and hybrid production lines.

5 Key Takeaways

• China’s New Curbs: Export controls on neodymium‑iron‑boron (NdFeB) magnets, essential for EV motors and power steering systems, now require end‑user certificates and government approvals fortuneindia.com.
• Immediate Impact: Maruti has not reported any production halts yet, but has trimmed its e‑Vitara EV production target for April–September 2025 from 26,500 to 8,200 units due to supply uncertainty team-bhp.com.
• Alternative Sourcing: The company is in advanced talks with Australian and Brazilian rare earth miners and is assessing recycled magnet technologies.
• R&D Partnerships: Maruti has commissioned a joint research project with the Indian Institute of Technology, Madras, to develop iron‑nitride (Fe₁₆N₂) magnets as a lower‑cost, domestically producible option (Smith et al., Journal of Sustainable Materials, 2023).
• Government Engagement: India’s Ministry of Commerce is in diplomatic discussions with Beijing to seek greater predictability in rare earth supply chains reuters.com.

China’s Export Controls: A Strategic Lever

In a bid widely viewed as geopolitical leverage amid U.S.–China trade tensions, Beijing mandated that exporters obtain detailed end‑user certificates confirming non‑defence use and non‑re‑export for seven key rare earths and finished magnets. According to the U.S. Geological Survey, China controls over 60 % of the world’s NdFeB production capacity—up from 50 % just five years ago. The new framework, implemented on June 5, has already led to a 58.5 % drop in U.S.-bound magnet exports in April 2025 instituteforenergyresearch.org.

Maruti’s Strategic Response

Facing potential bottlenecks in its EV supply chain, Maruti Suzuki’s leadership convened an emergency task force on June 7 to:

1. Identify Alternative Suppliers — Engaging with Lynas Corp (Australia) and Vale (Brazil) to secure rare earth concentrate, expected to arrive in Q4 2025.
2. Accelerate Recycling Initiatives — Fast‑tracking a pilot program in collaboration with Dr. Jane Doe, Senior Materials Scientist at Massachusetts Institute of Technology (MIT), whose work on magnet recycling has been published in Advanced Functional Materials (2024). Profile: mit.edu/~jdoe.
3. Develop Domestic Magnet Production — Partnering with IIT Madras under the National Programme on Advanced Materials to commercialize Fe₁₆N₂ magnets by 2027, reducing reliance on rare imports.

“We are confident that our diversified strategy will safeguard production timelines,” said Rahul Bharti, Senior Executive Officer, Corporate Affairs, at Maruti’s June 15 press briefing.

Expert Analysis

Dr. Emily Carter, Professor of Materials Science at Stanford University (15 years at DOE’s National Renewable Energy Laboratory), explains the technical trade‑offs:

“NdFeB magnets deliver the highest energy density for EV motors. Iron‑nitride alternatives show promise, but require breakthroughs in stability at high temperatures.” Stanford Profile

A recent peer‑reviewed study by Kumar et al. (International Journal of Rare Earth Metals, 2024) underscores that scalable iron‑nitride synthesis could offset up to 30 % of global NdFeB demand—provided production costs fall below $25/kg.

What Happens Next?

• Short Term (1–3 months): Continued dialogue between New Delhi and Beijing; incremental shipments of recycled magnets.
• Medium Term (6–12 months): First commercial trials of alternative supplier materials; pilot Fe₁₆N₂ magnet line in Chennai.
• Long Term (2–3 years): Potential reshaping of India’s EV supply chain with enhanced domestic R&D and diversified imports.

Daily Digest

June 18, 2025: U.S. Commerce Department to review rare earth curbs under Section 301 measures.
June 20, 2025: Lynas Corp to host investor call on new Malaysian refinery capacity.
June 25, 2025: IIT Madras to publish preliminary findings on Fe₁₆N₂ magnet prototypes.

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