From DCB editorialPresent June 2, 2025
Car manufacturers all over the world make urgent concerns about an impending lack of rare earth magnets from China that threatens vehicle production within a few weeks. These magnets are of essential importance for a variety of automotive components, from windshield wiping engines and anti-lock brake sensors to power steering, automatic transmission and electric motors.
A letter from May 9th from the Allianz for Automobile innovation – representation of companies such as GM, ToyotaVolkswagen and Hyundai – warned the Trump administration that the vehicle assembly lines in the United States could soon have slowed down or switching off without reliable access to these materials.
The deficiency results from China’s recent export restrictions for rare earth magnets that require new licenses for outgoing programs. Since China controls more than 90% of the global processing capacity for these materials, the restrictions have dramatically reduced the export volume and caused uncertainties for global supply chains.
In April alone, the exports of rare earth magnets from China were shortened in half, especially due to a complex and opaque license process, which requires extensive documentation of exporters. Industry groups, including Mema, The vehicle supplier associationSigned the letter together and emphasized the severity of the threat to the US production.
They warned that there could be considerable setbacks without immediate intervention or access to alternative sources of supply. This can include a reduction in production or full stopover in large vehicle factories, the threat of jobs and supply chains in the entire automotive industry.
