Global car manufacturers are in a race against time to secure rare earth materials as China prepares to implement new export restrictions that could disrupt global supply chains. The looming deadline has triggered fears of component shortages, production slowdowns, and potential plant closures across major automotive hubs.
Rare earth elements are essential for a wide range of vehicle components—from side mirrors and sensors to electric vehicle (EV) motors. These materials are also key to clean energy technologies, making them critical to the transition toward electrified transport.
China dominates the global rare earth market, controlling up to 70% of mining, 85% of refining capacity, and 90% of alloy and magnet production. The country’s latest export control list, which includes elements such as ytterbium, holmium, and europium, is expected to intensify shortages.
“The situation is very tense,” said Nadine Rajner, CEO of German metal-powder supplier NMD. “Customers are looking everywhere but China for supply.”
To counter this dominance, the United States and Australia have signed a new critical minerals agreement aimed at boosting alternative sources and investments in non-Chinese supply chains. However, the global refining gap remains vast—China still controls nearly all heavy rare earth refining capacity.
Recycling offers one solution, with companies like Neutral in France recovering rare earths from hundreds of thousands of vehicles annually. Yet, scaling this remains a major challenge.
The November 8 export control deadline is already straining automakers. “They can shut us down in two months, the entire auto industry,” said Ryan Grimm, Toyota Motor’s North America Vice President of Purchasing Supplier Development.
To reduce dependence, carmakers such as BMW, Renault, General Motors, and suppliers like ZF and BorgWarner are developing EV motors that use little or no rare earth content. UK-based Monumo is also using AI-driven simulations to help manufacturers cut rare earth use by an average of 24%.
Still, experts warn that new technologies and non-Chinese supply chains are years away from meeting global demand. China’s pricing power and strategic influence over critical minerals are likely to persist.
“This is not the end of export controls,” said Jan Giese of rare earth trader Tradium. “China is playing a long game.”
