Rare earth magnet crisis: No impact on production of Hyundai EV, ICE models, says COO Tarun Garg

China, which accounts for over 90% of global refined rare earth magnet output, imposed export controls in April 2025, mandating licences. The new framework requires end-use certification to ensure non-military use.

"As far as Hyundai Motor India is concerned, we have no issues in the immediate future with production, both for EVs as well as for other cars," Garg told Moneycontrol in an interaction.

"There is no problem at all. As it is, we are a part of the Hyundai Motor Group. If you see, our ability to fight through a crisis is much better. In fact, when the semiconductor crisis happened in Covid times, Hyundai Motor Group was in a much better position. This is the advantage of being a part of a big group. Your ability increases," he added.

When asked if the company is contemplating a reassessment of its supply-chain strategy for rare earth magnets, Garg observed that since there is no problem at present, Hyundai is not thinking about it.

With wholesales of 598,666 units in the domestic market, Hyundai was the second largest passenger vehicle manufacturer in India in FY25, ahead of Tata Motors (553,585 units) and Mahindra & Mahindra (551,487 units). The Creta-maker was also the second largest car exporter at 163,386 units, behind Maruti Suzuki India (330,081 units).

However, Mahindra (104,761 units) has moved ahead of Hyundai (88,235 units) in domestic volumes in FY26 year-to-date, taking the second position, while Tata (86,756) sits at the fourth spot now.

On this struggle for the second position between the three companies, Garg said: "We continue to focus on the quality of sales. We are adjusting our production in these tough times so that we can increase our exports and do our best in the domestic market as well. If we had no export opportunity, then there was no choice but to go for price cuts or discounting. But we do not want to do that. A very good balance between domestic and exports is helping us navigate."

Hyundai is aiming for a 7-9% year-on-year (y-o-y) increase in exports in FY26. Apart from the Ioniq 5, which is assembled in India, the carmaker exports all its models to over 80 countries. The carmaker is a hub for Hyundai Motor Company for emerging markets like Middle East, Africa, Latin America and Asia.

"In the long term, our plan is to continue to increase our focus on exports because once our capacity kicks in, then we will have headroom to increase exports. Our current exports contribute 21% to our sales. Going forward, the target is to slowly reach towards 30%," he noted.

Hyundai will start manufacturing operations at its new Talegaon plant in Pune in the third quarter of the current fiscal. Acquired from General Motors, the facility will produce over 200,000 units annually. The carmaker's Sriperumbudur plant in Chennai has an annual installed capacity of 824,000 units, with the utilisation being over 92%.

Apart from capacity enhancement, Hyundai is also expanding its product portfolio. Last month, it announced that it will introduce 26 cars, including 20 ICE models and six EVs, by FY30. Among them will be completely new nameplates, full model changes and mid-cycle updates with a focus on the sport utility vehicle (SUV) body-style.

"Our new plant is now only three months away. And with the new plant, the new model cycle will kick in, which we have already announced. 26 new models will be launched in the next five years. It is a matter of a few months which we have to navigate," Garg said.

With a capacity of over 1,000,000 units and a new model cycle, we know that we can get back the lost market share, he said, adding that "we are not unduly disturbed because of these two months of sales."