Rare Earth Crisis 2025: Will Indian Auto Industry Survive China’s Move?

The global race for electric vehicles (EVs) just hit a massive speed bump and it’s coming straight from China. In a strategic move that has sent shockwaves across international markets, China has tightened export controls on rare earth metals, a set of 17 critical elements essential for EV batteries, motors, and other high-tech applications.

But why does this matter so much for India?

India’s automotive industry, especially companies like Tata Motors, Mahindra Electric, Maruti Suzuki, Ola Electric, and others, is heavily dependent on imports of these rare earth elements many of which are either sourced directly from China or indirectly via global supply chains dominated by Chinese firms.

Rare earths like neodymium, praseodymium, dysprosium, and lithium are not just buzzwords they’re the lifeblood of electric mobility. With China accounting for nearly 90% of global rare earth processing capacity, any shift in policy from Beijing instantly ripples through production timelines, procurement costs, and ultimately, the price consumers pay.

• How China’s rare earth restrictions in 2025 are reshaping global EV dynamics

• What Indian auto companies are doing to diversify their supply chains

• The long-term risks of depending on a single country for critical minerals

• Whether India’s own rare earth mining efforts (in states like Andhra Pradesh and Tamil Nadu) can fill the gap anytime soon

As India ramps up its electric vehicle adoption goals for 2030 and beyond, any disruption in raw materials could stall progress. This development also raises concerns about national security, manufacturing independence, and the broader Make in India mission.