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Irish Times
01-07-2025
- Automotive
- Irish Times
Car makers sound alarm as China turns off tap on mineral supplies
China has spent several years trying to corner much of the global market for minerals and materials used in high-tech and manufacturing industries. It has been a point of concern for many of the world's car makers for some time that China is all but a monopoly when it comes to the supply and refinement of the likes of lithium, crucial for electric car batteries. Now, that dominance is being asserted as China has, up to a point, turned off the tap when it comes to the supply of rare-earth metals, many of which are crucial to the making of combustion-engined and hybrid cars as well as electric vehicles (EVs) . So tight has supply now become that Japanese car maker Suzuki has said it will pause production of its popular Swift small car until supply restrictions ease. CLEPA, the organisation that represents Europe's car component and parts suppliers, has said the restrictions in rare-earth metals, such as dysprosium, represent a significant threat. In a statement, CLEPA's secretary general Benjamin Krieger said: 'With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in the European supplier sector.' Could this lead to another crunch in car production, similar to that seen in 2021 and 2022 when Covid restrictions and a global shortage of microchips sent the car industry into a spiral? It may well do. The VDA, the German umbrella organisation that represents that country's car industry, has warned that China's restrictions could cause car factories to 'grind to a halt'. READ MORE Speaking to CNBC, VDA president Hildegard Muller said: 'The Chinese export restrictions on rare earths are a serious challenge for the security of supply, and not just in the automotive supply chains. Although some licences have now been granted, this is currently not enough to ensure smooth production. A further problem arises from the slow clearance of exports for which a valid export licence has been granted. If the situation does not change quickly, production delays and even production stoppages can no longer be ruled out.' The situation became serious enough in May that it broke down the corporate rivalry between General Motors, Toyota , Hyundai and Volkswagen sufficiently that those companies came together to form a lobbying group called the Alliance For Automotive Innovation, which wrote an open letter to the US government. It said: 'Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering and cameras.' Previously, the world's car makers were criticised for not acting swiftly enough to shore up the supply of microchips when the supply of that technology became severely restricted. Tech companies such as Apple and Samsung saw the problem coming over the horizon much sooner and acted to bulk up on inventory This left many car makers out in the cold and forced to cut or even stop production, or to build cars with fewer high-tech features. There seemed to have been a thaw in recent months, as both China and the EU sought to work together to circumvent the so-called Trump tariffs It's not just high-tech features which are affected by this shortage, however. While batteries and touchscreens certainly use their share of rare-earth metals, you'll also find them – including the likes of platinum, palladium, and rhodium – in catalytic converters, oil pumps, stereo speakers and windscreen wiper mechanisms. There's another significant difference this time around. Whereas the semiconductor microchip shortage affected the whole world, this time China appears to be specifically targeting not only car makers, but other industries which rely on the supplies of these materials, possibly in an effort to increase the export success of its own companies. It marks yet another step change in the relationship between the EU and China's car makers. That relationship had become exceptionally frosty in the wake of the EU imposing stiff tariffs on China's electric cars, amid claims and counter-claims of state subsidies and low-cost 'dumping'. There seemed to have been a thaw in recent months, as both China and the EU sought to work together to circumvent the so-called Trump tariffs , but this rare-earth restriction could indicate a new phase of China's expansionist industrial policy. The likes of BYD and MG (the latter long since owned by China's Shanghai Automotive Industrial Corporation) are looking to duck around European tariffs both by building factories in the EU and Turkey (BYD's Hungarian factory begins producing its first cars later this year) as well as ramping up the numbers of plug-in hybrid cars – which are not affected by tariffs – that they sell. BYD, in particular, has announced major ambitions for European sales, including plans to become the biggest-selling brand in the UK and elsewhere. It's backed up those ambitions by taking advantage of stumbling Tesla sales, picking up customers disgruntled by Elon Musk's controversial public and political actions. BYD's vice-president, Stella Li, has previously said she wants the company to effectively become a European car maker, with more than one factory in Europe, 'putting jobs and investment into the community'. China's move to restrict exports is also a form of response to the inconsistent trading policies of the current Trump administration That may be of cold comfort to those currently employed by rival car makers who now can't access the supplies and materials they need, especially if it turns out that rather than the restrictions being merely the result of sclerotic bureaucracy, China is weaponising the supply chain specifically to damage rival economies and companies. Both Nissan and BMW have said they can foresee production restrictions if the tightness of supply continues, although both Volkswagen and Mercedes have said they have plans in place to source materials from other countries. With China having a 60 per cent chokehold on the world's supply of rare-earth metals, that may prove easier said than done. Mercedes has pointed out that it is working on new designs, especially electric motors developed by its UK-based subsidiary YASA, that use far fewer rare-earth metals, and in some cases which don't use any at all. China's move to restrict exports is also a form of response to the inconsistent trading policies of the current Trump administration in the US, and is effectively a form of leverage against higher tariffs. Reuters reports that the 'big three' US car makers – General Motors, Ford and Stellantis Group (a European-based conglomerate, but it owns Chrysler, Dodge, Jeep, and Ram commercial vehicles) – had all been granted export licences for some rare Earth metals. It remains to be seen if these new export agreements will allow Ford to restart production of its Explorer SUV (the large US-market car, not the compact all-electric European model of the same name, which is made in Cologne), which had been paused.
NDTV
06-06-2025
- Automotive
- NDTV
China's Rare Earth Restrictions Cripple Auto Industry Globally
The global auto industry has been rocked by China's decision to restrict exports of rare earth magnets that are crucial to making vehicles. With a near monopoly on the output of rare earth elements, Beijing is using them as a key weapon in its trade war with Washington. Here we look at the implications for the sector. China's restrictions China accounts for more than 60 percent of rare earth mining production and 92 percent of global refined output, according to the International Energy Agency, driven by generous state subsidies and lax environmental protections. As the trade war with the United States has developed, Beijing has required Chinese companies since April to obtain a license before exporting these materials -- including rare earth magnets -- to any country. While these rules were expected to be relaxed after a tariff deal in Geneva last month, industry stakeholders said they have not been eased at a sufficient pace. "Since early April, hundreds of export license applications have been submitted to Chinese authorities, yet only approximately one-quarter appear to have been approved," the European Association of Automotive Suppliers (CLEPA) said Wednesday. "Procedures are opaque and inconsistent across provinces, with some licenses denied on procedural grounds and others requiring disclosure of intellectual property-sensitive information." And US Treasury Secretary Scott Bessent this month said Beijing was "blocking certain products it had agreed to market as part of our agreement". China, however, defended its "common international practice". Few alternatives Rare earths are 17 metals used in a wide variety of everyday and high-tech products, from light bulbs to guided missiles. Two of them -- neodymium and dysprosium -- are crucial to making powerful magnets for electric vehicles and wind turbines. These components play an essential role in "electric motors, sensors, power steering, and regenerative braking systems, among other advanced features in modern vehicles", according to consultancy firm BMI. China's restrictions highlight the world's heavy dependency, with Europe importing 98 percent of its rare earth magnets from the country, BMI said. And, it notes, while the European Union has introduced regulations to boost its production of critical minerals, "rare earth processing operations in Europe not only struggle to compete with Chinese producers on cost, but also lack the necessary scale to supply its automotive sector". Industry group CLEPA added that efforts undertaken in Europe to diversify supply sources "offer no short-term solutions and cannot address the acute risks currently facing supply chains". Production halts, supply concerns The auto industry is already suffering globally. "With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in Europe's supplier sector," said CLEPA Secretary General Benjamin Krieger. The group on Tuesday reported "significant disruptions" in Europe, where these restrictions "have led to the shutdown of several production lines and plants". It warned that "further impacts (were) expected in the coming weeks as inventories deplete". "The slow pace of customs formalities for shipments requiring a valid export license poses a problem," Hildegard Muller, president of Germany's automotive industry association VDA, told AFP. "If the situation does not evolve quickly, production delays, or even production losses, can no longer be ruled out." While not citing "direct restrictions" for itself, Germany's Mercedes-Benz said it was maintaining "close contact" with its suppliers, while Japan's Suzuki Motor said Thursday it "had ceased production of certain models due to a component shortage", including rare earths, the Nikkei daily reported. And US auto giant Ford had to halt production for a week in May at its Chicago plant making the Explorer SUV because of shortages, according to Bloomberg. The firm told AFP that it does not comment on "supplier issues". Indian scooter-maker Bajaj Auto recently warned the restrictions could impact its production in July. "The slow processing of (export) requests appears to be causing significant supply shortages," Cornelius Bahr from IW Economic Institute told AFP. "Statements (by German companies) indicating that stocks will only suffice through the end of June should certainly be taken seriously." The electronics industry, another major consumer of rare earths, could also suffer. "Concern is visibly growing, many companies currently have resources only for a few weeks or months," said Wolfgang Weber, president of Germany's electronics industry association ZVEI. Hope for a turnaround While uncertainty remains, talks between US President Donald Trump and Chinese counterpart Xi Jinping on Thursday seem to have paved the way for a potential easing by Beijing. "There should no longer be any questions respecting the complexity of (exporting) Rare Earth products," Trump wrote on his Truth Social platform after their phone call. A rapid resolution of the China-US row remains unlikely but reports indicate "an agreement was reached to overcome immediate obstacles, particularly concerning critical minerals", noted Wendy Cutler, vice president of the Asia Society Policy Institute.
The Sun
06-06-2025
- Automotive
- The Sun
Auto sector hit by China rare earth curbs
TOKYO: The global auto industry has been rocked by China's decision to restrict exports of rare earth magnets that are crucial to making vehicles. With a near monopoly on the output of rare earth elements, Beijing is using them as a key weapon in its trade war with Washington. Here we look at the implications for the sector. China's restrictions China accounts for more than 60% of rare earth mining production and 92% of global refined output, according to the International Energy Agency, driven by generous state subsidies and lax environmental protections. As the trade war with the US has developed, Beijing has required Chinese companies since April to obtain a licence before exporting these materials – including rare earth magnets – to any country. While these rules were expected to be relaxed after a tariff deal in Geneva last month, industry stakeholders said they have not been eased at a sufficient pace. 'Since early April, hundreds of export licence applications have been submitted to Chinese authorities, yet only approximately one-quarter appear to have been approved,' the European Association of Automotive Suppliers (CLEPA) said Wednesday. 'Procedures are opaque and inconsistent across provinces, with some licenses denied on procedural grounds and others requiring disclosure of intellectual property-sensitive information.' And US Treasury Secretary Scott Bessent this month said Beijing was 'blocking certain products it had agreed to market as part of our agreement'. China, however, defended its 'common international practice'. Few alternatives Rare earths are 17 metals used in a wide variety of everyday and high-tech products, from light bulbs to guided missiles. Two of them – neodymium and dysprosium – are crucial to making powerful magnets for electric vehicles and wind turbines. These components play an essential role in 'electric motors, sensors, power steering, and regenerative braking systems, among other advanced features in modern vehicles', according to consultancy firm BMI. China's restrictions highlight the world's heavy dependency, with Europe importing 98% of its rare earth magnets from the country, BMI said. And, it notes, while the European Union has introduced regulations to boost its production of critical minerals, 'rare earth processing operations in Europe not only struggle to compete with Chinese producers on cost, but also lack the necessary scale to supply its automotive sector'. Industry group CLEPA added that efforts undertaken in Europe to diversify supply sources 'offer no short-term solutions and cannot address the acute risks currently facing supply chains'. Production halts, supply concerns The auto industry is already suffering globally. 'With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in Europe's supplier sector,' said CLEPA secretary-general Benjamin Krieger. The group on Tuesday reported 'significant disruptions' in Europe, where these restrictions 'have led to the shutdown of several production lines and plants'. It warned that 'further impacts (were) expected in the coming weeks as inventories deplete'. 'The slow pace of customs formalities for shipments requiring a valid export licence poses a problem,' Hildegard Muller, president of Germany's automotive industry association VDA, told AFP. 'If the situation does not evolve quickly, production delays, or even production losses, can no longer be ruled out.' While not citing 'direct restrictions' for itself, Germany's Mercedes-Benz said it was maintaining 'close contact' with its suppliers, while Japan's Suzuki Motor said Thursday it 'had ceased production of certain models due to a component shortage', including rare earths, the Nikkei daily reported. And US auto giant Ford had to halt production for a week in May at its Chicago plant making the Explorer SUV because of shortages, according to Bloomberg. The firm told AFP that it does not comment on 'supplier issues'. Indian scooter-maker Bajaj Auto recently warned the restrictions could impact its production in July. 'The slow processing of (export) requests appears to be causing significant supply shortages,' Cornelius Bahr from IW Economic Institute told AFP. 'Statements (by German firms) indicating that stocks will only suffice through the end of June should certainly be taken seriously.' The electronics industry, another major consumer of rare earths, could also suffer. 'Concern is visibly growing, many companies currently have resources only for a few weeks or months,' said Wolfgang Weber, president of Germany's electronics industry association ZVEI. Hope for a turnaround While uncertainty remains, talks between US President Donald Trump and Chinese counterpart Xi Jinping on Thursday seem to have paved the way for a potential easing by Beijing. 'There should no longer be any questions respecting the complexity of (exporting) rare earth products,' Trump wrote on his Truth Social platform after their phone call. A rapid resolution of the China-US row remains unlikely but reports indicate 'an agreement was reached to overcome immediate obstacles, particularly con-cerning critical minerals', noted Wendy Cutler, vice-president of the Asia Society Policy Institute.
The Sun
06-06-2025
- Automotive
- The Sun
Auto sector reels from China's rare earth restrictions
TOKYO: The global auto industry has been rocked by China's decision to restrict exports of rare earth magnets that are crucial to making vehicles. With a near monopoly on the output of rare earth elements, Beijing is using them as a key weapon in its trade war with Washington. Here we look at the implications for the sector. China's restrictions China accounts for more than 60 percent of rare earth mining production and 92 percent of global refined output, according to the International Energy Agency, driven by generous state subsidies and lax environmental protections. As the trade war with the United States has developed, Beijing has required Chinese companies since April to obtain a licence before exporting these materials -- including rare earth magnets -- to any country. While these rules were expected to be relaxed after a tariff deal in Geneva last month, industry stakeholders said they have not been eased at a sufficient pace. 'Since early April, hundreds of export licence applications have been submitted to Chinese authorities, yet only approximately one-quarter appear to have been approved,' the European Association of Automotive Suppliers (CLEPA) said Wednesday. 'Procedures are opaque and inconsistent across provinces, with some licenses denied on procedural grounds and others requiring disclosure of intellectual property-sensitive information.' And US Treasury Secretary Scott Bessent this month said Beijing was 'blocking certain products it had agreed to market as part of our agreement'. China, however, defended its 'common international practice'. Few alternatives Rare earths are 17 metals used in a wide variety of everyday and high-tech products, from light bulbs to guided missiles. Two of them -- neodymium and dysprosium -- are crucial to making powerful magnets for electric vehicles and wind turbines. These components play an essential role in 'electric motors, sensors, power steering, and regenerative braking systems, among other advanced features in modern vehicles', according to consultancy firm BMI. China's restrictions highlight the world's heavy dependency, with Europe importing 98 percent of its rare earth magnets from the country, BMI said. And, it notes, while the European Union has introduced regulations to boost its production of critical minerals, 'rare earth processing operations in Europe not only struggle to compete with Chinese producers on cost, but also lack the necessary scale to supply its automotive sector'. Industry group CLEPA added that efforts undertaken in Europe to diversify supply sources 'offer no short-term solutions and cannot address the acute risks currently facing supply chains'. Production halts, supply concerns The auto industry is already suffering globally. 'With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in Europe's supplier sector,' said CLEPA Secretary General Benjamin Krieger. The group on Tuesday reported 'significant disruptions' in Europe, where these restrictions 'have led to the shutdown of several production lines and plants'. It warned that 'further impacts (were) expected in the coming weeks as inventories deplete'. 'The slow pace of customs formalities for shipments requiring a valid export licence poses a problem,' Hildegard Muller, president of Germany's automotive industry association VDA, told AFP. 'If the situation does not evolve quickly, production delays, or even production losses, can no longer be ruled out.' While not citing 'direct restrictions' for itself, Germany's Mercedes-Benz said it was maintaining 'close contact' with its suppliers, while Japan's Suzuki Motor said Thursday it 'had ceased production of certain models due to a component shortage', including rare earths, the Nikkei daily reported. And US auto giant Ford had to halt production for a week in May at its Chicago plant making the Explorer SUV because of shortages, according to Bloomberg. The firm told AFP that it does not comment on 'supplier issues'. Indian scooter-maker Bajaj Auto recently warned the restrictions could impact its production in July. 'The slow processing of (export) requests appears to be causing significant supply shortages,' Cornelius Bahr from IW Economic Institute told AFP. 'Statements (by German companies) indicating that stocks will only suffice through the end of June should certainly be taken seriously.' The electronics industry, another major consumer of rare earths, could also suffer. 'Concern is visibly growing, many companies currently have resources only for a few weeks or months,' said Wolfgang Weber, president of Germany's electronics industry association ZVEI. Hope for a turnaround While uncertainty remains, talks between US President Donald Trump and Chinese counterpart Xi Jinping on Thursday seem to have paved the way for a potential easing by Beijing. 'There should no longer be any questions respecting the complexity of (exporting) Rare Earth products,' Trump wrote on his Truth Social platform after their phone call. A rapid resolution of the China-US row remains unlikely but reports indicate 'an agreement was reached to overcome immediate obstacles, particularly concerning critical minerals', noted Wendy Cutler, vice president of the Asia Society Policy Institute.
Yahoo
05-06-2025
- Automotive
- Yahoo
Suzuki production halted by China rare-earth export restrictions
Suzuki has suspended production of most of its Swift car models at its Japanese plants due to a shortage of parts linked to China's rare-earth export restrictions, according to a Nikkei business daily report. Reports say the suspension of production began on May 26 and is set to continue until June 6 due to a shortage of key components. The move is reportedly linked to delays in parts procurement caused by slow Chinese export licence approvals. China accounts for over two thirds of the world's rare-earth metal production and an even higher percentage of rare-earth magnet manufacturing. Beijing has slowed the issue of export licences since imposing new controls in April. The tightening of export licences was in response to US President Donald Trump's newly impose tariffs on imported Chinese goods. Rare-earth elements and magnets are essential for the electric motors used in vital components in various automotive applications, from windshield-wiper motors to anti-lock braking sensors and motors for electrified vehicles. Vehicle makers and suppliers around the world also stand to be impacted by the disruption to supply chains. Europe's automotive components suppliers' association, CLEPA, also warned that the European automotive supply industry is 'already experiencing significant disruption due to China's recent export restrictions on rare-earth elements and magnets'. It said the restrictions have led to the shutdown of 'several production lines and plants across Europe, with further impacts expected in the coming weeks as inventories deplete'. CLEPA called for 'constructive China-EU cooperation to ensure stable and resilient supply chains for the global automotive sector'. The trade association pointed out that the affected components are critical to both combustion engine and electric vehicles, highlighting the wide-reaching consequences of the measures. It said that since early April, hundreds of export license applications have been submitted to Chinese authorities, yet only approximately one-quarter appear to have been approved. It added that procedures are opaque and inconsistent across provinces, with some licenses denied on procedural grounds and others requiring disclosure of IP-sensitive information. 'With a deeply intertwined global supply chain, China's export restrictions are already shutting down production in Europe's supplier sector,' said Benjamin Krieger, Secretary General of CLEPA. 'We urgently call on both the EU and Chinese authorities to engage in a constructive dialogue to ensure the licensing process is transparent, proportionate, and aligned with international norms.' CLEPA also noted that Chinese suppliers of permanent magnets rely on their European customers just as much as European manufacturers depend on Chinese materials. It also warned that sustained disruptions will reinforce ongoing efforts in Europe to diversify sourcing and invest in the development of rare earth-free electric motors. However, it added that such measures 'offer no short-term solutions and cannot address the acute risks currently facing supply chains'. Moreover, they also 'threaten automotive production and thousands of jobs in the European Union'. "Suzuki production halted by China rare-earth export restrictions – report" was originally created and published by Just Auto, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
