Shares of Hyundai Motor India climbed over a percent on June 12 after reports suggested the company is unlikely to face any near-term disruption in electric vehicle (EV) production despite mounting concerns over a global rare earth magnet shortage.

Hyundai India is tapping into the global supply chain of its parent, Hyundai Motor Company, to secure rare earth magnets—critical components used in EVs and other advanced automotive systems. The move comes amid tighter export regulations from China, which have disrupted shipments to Indian manufacturers since April.

Reuters also reported that Hyundai Motor Company is said to be well-stocked to meet its requirements through the rest of the year and does not foresee any immediate production cuts.

Investor sentiment was buoyed by the company's inventory news, sending the stock higher in an otherwise cautious market. The gains also contrast with recent news from peers like Maruti Suzuki, which was forced to scale down near-term EV production due to raw material shortages.

Rare earth magnet supply has tightened globally after China imposed a rule requiring exporters to furnish end-use certificates for outbound shipments, effectively slowing deliveries. With China controlling over 90 percent of global supply, automakers worldwide have been left scrambling to shore up inventories.

Two-wheeler majors Bajaj Auto and TVS Motor Company also flagged concerns and cautioned that production could come to a halt as early as this month.

"If the disruption drags on, manufacturers may be forced to pass on the cost to consumers — price hikes of up to 8 percent for EV models are on the table. Beyond prices, the pressure may hit product launch timelines and expansion plans. The industry could face margin erosions of 50 to 100 basis points, especially in the two-wheeler EV space.