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Automakers scramble as China tightens grip on critical rare earth exports
CDG News Alert (1 min. read)
Anna del Villar
June 05, 2025
Driving the news: Auto industry groups are sounding the alarm as China's rare earth export restrictions start shutting down European supplier plants and production lines.
For context: China imposed export controls on several rare earth elements and magnets in early April as retaliation for Trump's tariffs. These materials are crucial for both combustion engines and electric vehicles, but only about 25% of the hundreds of export license applications have been approved so far, according to Europe’s auto supplier association CLEPA.
Why it matters: With China controlling roughly 69% of global rare earth production and demand expected to explode during the clean energy transition, this could be just the beginning of a much larger supply crunch. Germany's car lobby warns that production could "grind to a halt" if the situation doesn't improve quickly.
What we're watching: Automakers are scrambling for alternatives with mixed results. BMW admits some suppliers have been affected, while Mercedes and VW say they're stable for now. Japanese automaker Suzuki has already suspended Swift production due to the curbs.
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