Yesterday flipping through on FOX Business, they were making fun of my liberal brother's favorite commentator, John Stewart, who was making fun of people worried about not getting magnets. Kudlow refused to call him names, but the others were not so kind.
I think it IS a big deal Trump's team made a deal with China to get our rare Earth products in exchange for our ethylene so they can make plastics.
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India has two weeks to avoid an EV industry crisis, analysts warn
Prasanth Aby Thomas, DIGITIMES, Bangalore
Thursday 12 June 2025
India's EV industry faces the risk of large-scale production halts by the end of July unless China clears rare earth export approvals within the next two weeks, according to Puneet Gupta, director of India & ASEAN automotive market at S&P Global.
"If we don't get the approval in the next two weeks, then for sure most of the industry players will be stopped," Gupta said in an interview with Digitimes Asia. "There will be production halts almost everywhere."
The delays stem from China's export controls on key rare earth elements critical for EV component manufacturing. While Western OEMs have reportedly begun receiving approvals, India remains "stuck," Gupta noted.
The timeline is tight. Once Chinese authorities clear exports, it would take another 30 days for the material to complete customs procedures, move to supplier warehouses, and finally reach production lines.
"If the consignment isn't dispatched from China within the next 15 days, the industry will be hit by mid-July," Gupta said.
A temporary factory shutdown by Maruti Suzuki in June may offer limited relief to the broader industry. "That came as a savior," he said. "Maruti is almost 40 to 50 percent of the industry [the overall auto industry, not EVs alone]." This could stretch the timeline by about a week, pushing the onset of major disruption to the last week of July.
If approvals aren't received soon, Gupta warned that certain models or variants might face disruption. "We may see certain crises for certain models, certain variants… happening most probably this month end or early July," he said.
Inventory across dealers currently stands at over two months, which may buffer the short-term impact. "The real impact will start coming towards August," he said.
However, Gupta added that the industry largely remains optimistic about the two countries reaching a breakthrough.
High-volume OEMs are most at risk
While the restrictions affect multiple segments, Gupta said the most exposed companies are high-volume manufacturers that rely heavily on lean inventories.
"Battery control modules, magnets, motors - anything related to it will get impacted," he said. "If you are a manufacturer with high volume, the probability again goes up."
These companies typically follow "milk run systems" with just-in-time deliveries. "Once you are like Maruti Suzuki, which is churning out 2 million vehicles now, it is not possible for their suppliers to stock much either," Gupta added.
Higher-end variants with greater electronic content are especially vulnerable. "The probability will again be more," he said, emphasizing that many OEMs are already working on different product and variant mix plans to cope with the situation.
Long-term investor interest remains intact
Despite the current disruption, Gupta does not expect global OEMs like Mercedes, Hyundai, or VinFast to lose interest in India.
"India is a very long-term story, and these are short-term barriers," he said. "With more than 1.4 billion people, India is just at its inflection point in terms of car sales… the potential is there."
He pointed out that companies like BMW and Mercedes see rising numbers of millionaires in the Global South and view markets like India as long-term investments.
"But when it comes to real investing, they get stuck up," Gupta said, pointing to India's price-sensitive market as a barrier.
While India's new EV policy has attracted interest, "the fine print is not out," Gupta cautioned. "Investment is ?4,000 crore, but I don't think every player would like to invest a big amount."
Still, trade agreements could provide alternative pathways for premium OEMs. "Through agreements like the India-UK FTA, five to seven years down the line, the auto industry will definitely benefit," he said.
Dependency on China unlikely to end
Gupta emphasized that while countries and companies can reduce their reliance on China, eliminating it entirely is unlikely.
"The industry always tries to reinvent itself," he said. "But I don't think anybody is saying that we will not be dependent on China going forward, even a country like India."
For a capital-constrained country like India, "the best is that whatever best technologies you get in China or the US, you just buy them and then you produce them in India," he said. "It doesn't make sense to now do R&D from scratch if it's already been done by China."
Efforts like Make in India and Atmanirbhar Bharat may promote greater self-reliance, but total independence from Chinese supply chains is "not the way forward," Gupta concluded.
Article edited by Jack Wu
digitimes.com |
