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Mint
2 days ago
- Business
- Mint
China is still choking exports of rare earths despite pact with US
Two weeks after China promised the U.S. it would ease the exports of rare-earth magnets, Chinese authorities are dragging out approval of Western companies' requests for the critical components, a situation that could reignite trade tensions between Washington and Beijing. Western companies say they are receiving barely enough magnets for their factories and have little visibility of future supplies. Firms are waiting weeks as Chinese authorities scrutinize their applications—only to be rejected in some cases. And applications for raw rare earths, which are used to make magnets, are rarely granted. As a result, Western companies are concerned that the shortages could soon affect manufacturing. Companies are so desperate for magnets that they are opting for expensive airfreight whenever licenses are granted to prevent costly production shutdowns. Some manufacturers are experimenting with workarounds that would allow them to make their products without the most powerful magnets. 'It's hand to mouth—the normal supply-chain scrambling that you have to do," said Lisa Drake, a vice president overseeing Ford's industrial planning for batteries and electric vehicles, earlier this week. Although she said the situation had improved, the scarcity of the rare-earth magnets is forcing Ford to 'move things around" to avoid factory shutdowns, she said. Manufacturers have taken the continuing challenges as a sign that new Chinese rare-earth export restrictions, introduced in April after President Trump raised tariffs on China, are here to stay—contrary to White House assertions that the flow of the critical components would return to normal. 'Yes, the export restrictions have been paused on paper. However, ground reality is completely different," said Neha Mukherjee, a rare-earths analyst at Benchmark Mineral Intelligence. The licensing process is plagued by 'bureaucratic drag." China's Ministry of Commerce said Thursday that it has been accelerating the review of rare-earth export license applications and has approved 'a certain number." The supply of rare minerals such as gadolinium is tightly controlled by China. The restrictions illustrate the power Beijing holds through its formidable supply chains and how it can use them to inflict pain on Western businesses and exact concessions from the U.S. China makes 90% of the world's most powerful rare-earth magnets, a key component in everything from cars to jet fighters. In April, after Trump heaped stiff tariffs on Chinese products, Beijing established an export-control system for rare earths. While it said the license system was set up to regulate the export of materials for military use, the regime has in effect allowed China to clamp down on rare-earths supplies as it wishes. After April, the supply of magnets to Western businesses slowed to a trickle, causing shock waves for global car, defense and electronics makers. Exports of rare-earth magnets to the U.S. declined 93% in May from a year earlier. Ford stopped production of its Explorer SUV at its Chicago plant for a week in May. The U.S. accused China of slow-walking the approval of export licenses, which China denied. The shortage drove both sides back to the bargaining table earlier this month, where China agreed to free up the flow of rare earths in exchange for the U.S. easing its own restrictions on certain U.S. exports to China. Following the deal, Trump wrote that 'full magnets, and any necessary rare earths, will be supplied up front by China." However, China put only a six-month limit on any new licenses, The Wall Street Journal has reported. Now, in the applications for export licenses, Chinese authorities are asking Western companies for sensitive details such as contact information of those buying their magnets and even designs of how their magnets are integrated into components like motors. Chinese authorities justify the scrutiny as necessary to ensure the magnets aren't used for military purposes, say companies involved in the magnet trade. The U.S. has accused China of slow-walking the approval of export licenses, which China has denied. When companies skip certain questions on their magnet applications to avoid disclosing sensitive intellectual property or details of commercial arrangements, their applications languish or are denied. In some cases, the applicants have then been told to start over and include all of the required information in a new application, which takes 45 days to process, according to companies involved in rare-earth imports. 'The control is real," said a representative of one such company. 'There are thousands of applications the [Chinese authorities have] received." Earlier this month, Germany's main industry association called on the country's new government to push China to ease the approval process. 'German industry needs to be able to plan in the near term. Licensing procedures must not be used as a means of exerting political pressure," it said. Beijing also appears to be trying to prevent stockpiling by Western businesses. One Chinese magnet maker has warned clients seeking to import more magnets than usual that they may have to explain to government officials the 'business drivers" behind such large orders, according to an advisory note the magnet maker shared with clients. Fearful of shortages, many Western businesses are complying with the information requests—but are still facing long delays. The success of their application also depends on their supplier. Big state-connected magnet companies are getting export licenses faster than smaller private ones, according to many in the industry. 'The export policy for magnet[s] is still very strict," said a representative for one Chinese magnet maker. Now, some Western businesses say they are resigned to the fact that the restrictions may remain in place indefinitely. Some private Chinese magnet makers, who are under significant financial pressure due to the export controls, are working with clients to find workarounds. For instance, some are encouraging foreign clients to buy less-powerful magnets that don't include any controlled rare earths. Some Chinese companies are also working to develop stronger magnets that don't rely on restricted materials such as dysprosium and terbium. But swapping out the most powerful and heat-resistant magnets is often impossible for the auto and electronics industries, which rely on magnets to efficiently power motors. Olive Lien, an expert in semiconductor-cooling technology based in Taiwan, said many companies in recent months have been struggling to acquire rare-earth magnets needed for some high-end fan motors used in products such as AI servers and other high-performance computing systems. Many companies have been forced to redesign their products, such as by switching to cheaper and more readily available ferrite magnets, which are less powerful. One U.S. magnet importer said that while two licensing applications he was involved with were recently approved, others are dragging. 'The system is slow and burdensome," he said. 'Very detailed and confusing for the applicants." When automobile-parts companies do get their licenses approved, they are paying extra to rush the magnets to factories by air, costs which are often ultimately borne by the carmakers. 'These are the things you don't hear about, how much money it is taking to keep these factories running, you know, limping along," the magnet importer said. Write to Jon Emont at
Yahoo
5 days ago
- Automotive
- Yahoo
Ford says Michigan battery plant right move despite tariffs, political headwinds
MARSHALL, Mich. — Despite political headwinds, pushback from some local residents and now costly tariffs on equipment that has yet to reach U.S. shores, Ford Motor Co. executives say they still think building a $3 billion battery plant here was the right move for the automaker. Lisa Drake, Ford's vice president of technology platform programs and electric vehicle systems, told reporters here that the company has taken a substantial hit from import tariffs on equipment that will be coming to the U.S. from China. The 2 million-square-foot plant is slated to open in 2026 and produce lithium iron phosphate batteries for future EVs using some intellectual property from China-based Contemporary Amperex Technology Co. Limited (CATL). But Drake said the added costs are bearable in the long run. 'Even with the tariffs, this is still the right thing to do versus the choice of importing this technology into the U.S.,' Drake said. 'I'd still rather have the equipment here. I don't really want to pay a tariff, but right now that's the situation we're in.' Future Product Find our what powertrains, redesigns and freshenings are planned for the next four years. View the list Brand future product timelines The tariffs are the latest headwind for the plant 100 miles west of Detroit. Ford already scaled down the project from a larger planned investment in response to slowing EV adoption. Executive Chair Bill Ford said in May that the site was in peril if production tax credits from the Biden-era Inflation Reduction Act were eliminated in a federal budget bill making its way through congress. Drake said the tax credits essentially became a lifeline to the site after EV adoption rates slowed and that the automaker believes it's unfair to take away something that was promised when the project began. 'Because our timeline for investment is so long, when these rules change so fast, they're very material for us,' Drake said. 'We don't want to back off on this facility. If anything we want to go faster.' Sign up for the quarterly Automotive News U.S. Sales report to get data and news sent to your inbox as soon as it's compiled. Roughly 1,800 workers are currently building the site, and Ford Motor eventually expects to employ 1,700 people there building batteries. CATL will train the workers initially, but the equipment and work force will belong to Ford. Drake said the size of the workforce could change depending on the tax credits. 'It would be a shame to build these facilities and all of a sudden you have to scale back on the most important part of it, which is people,' Drake said. 'There are 1,700 jobs that don't come around that often.' The site also is under fire from politicians who oppose Ford's work with a Chinese battery company. CATL will train workers on battery cell manufacturing and how to use the equipment, although Ford will control the design and assembly of the packs that house the finished cells. Ford says LFP batteries charge faster, last longer and cost less than other types to make. The company has said it will launch a midsize EV pickup in 2027 on a new low-cost platform, although it has not yet confirmed that cells from the Marshall plant will be used in that model. Drake argued that licensing technology from CATL was the only viable option to quickly make the batteries at scale. 'It probably would have taken us a decade to catch up and have LFP technology on our own, with our own R&D,' she said. 'Hundreds of millions [of dollars], time. If Ford has capital, we want to spend our investment creating the manufacturing jobs here.' Have an opinion about this story? Tell us about it and we may publish it in print. Click here to submit a letter to the editor. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Miami Herald
5 days ago
- Automotive
- Miami Herald
Forget Tesla, Ford is eyeing even bigger EV rivals
When most Americans think of electric vehicles, the first brand that comes to mind is Tesla. The brand revolutionized the EV market in the U.S. by making the first mass-market EV with broad commercial appeal. Until recently, Tesla has dominated the U.S. market, but in recent years, its market share has dropped from 70% to 43.4% in the first quarter of 2025. Related: Ford reports another blowout sales month, but trouble could be ahead Now, newcomers from legacy car brands like General Motors and Ford are gobbling up market share as they look to knock Tesla from the top spot. U.S. electric vehicle sales volume jumped 11.4% year over year in the first quarter to 294,250 vehicles sold. This jump was led by GM, which doubled its EV sales from a year ago, while Ford EV sales were up only modestly. Battery electric vehicles reached 7.5% of all new car sales in the first quarter, an improvement from a year ago, but short of the 8.7% peak reached in Q4 2024. GM went from selling 457 EVs in Q1 2022 to nearly 32,000 in Q1 2025. After a disastrous start to the year, Tesla is basically back where it started in 2022 when it sold 129,743. Ford went from selling 6,734 to 22,500 over the same period, but its path has been anything but straight. The company has struggled with inconsistent sales and elusive profitability. However, Ford remains unbowed, and the company has its sights set on a much bigger prize than the U.S. car market. Image source: Olson/Getty Images Ford's electric vehicle division, Ford Model e, lost $5.1 billion in 2024. That was an increase from the $4.7 billion it lost in 2023. The company says it expects to lose $5.5 billion this year. But despite the daunting landscape, the company thinks it has what it takes to turn its fortunes around. Part of that strategy is making an affordable EV that can compete with Chinese models currently dominating the market. Lisa Drake, who leads Ford's EV industrial plan, recently spoke wth investors during a "candid dinner discussion" hosted by Bernstein lead automotive analyst Daniel Roeska. Related: Ford loses its last cheap vehicle to tariffs "Lisa Drake was explicit: Ford intends to match the cost structure of leading Chinese players. That means not just battery pricing, but full system cost from chassis and thermal systems to inverters and electronics," Roeska wrote, according to Axios. Ford will use its Advanced Electric Vehicle program to build an EV platform that will support eight different body styles, including trucks, crossovers, and possibly sedans. So Ford believes it can compete wth the BYDs of the world that dominate the Chinese EV market, which is much larger than the U.S. one. Ford has already announced that the first product will be a mid-sized pickup. But it will rely on an estimated $700 million federal tax credit this year that a Republican-led Congress could easily cancel. Ford released its May car sales report on Tuesday, June 3. The company reported a 16.3% increase in May sales to 220,959, mainly due to its biggest, most gas-guzzling models. Ford SUVs saw a 23% sales increase to 83,000, led by the Explorer, which had over 20,500 sold in the month. Meanwhile, Ford Trucks saw an 11.2% increase to 121,354 units sold. Overall, Ford has sold 930,925 vehicles to date, a 6.1% year-over-year increase, despite the specter of tariffs upsetting the whole apple cart. However, one area for the company that wasn't in the green was electric vehicle sales. More Ford news Popular Ford newcomer overtakes Jeep in a key areaFord CEO Jim Farley has a strong take on tariffsFord loses its last cheap vehicle to tariffs Ford sold 25% fewer electric vehicles this month than last, accelerating a declining sales trend for a segment of the company's brand that had been experiencing growth. The Mustang Mach-E was the lone electric vehicle model to see sales growth, with an 11% increase to 4,274. In fact, the Mach E is inching toward overtaking its non-electric brother in sales. Mustang sales were down 3% in the month to just over 5,000 sold. Related: Ford CEO Jim Farley has a strong take on tariffs The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Axios
5 days ago
- Automotive
- Axios
Ford plows ahead on EV battery factory amid political storm
Ford Motor is pushing ahead with a politically controversial battery factory in Michigan, even as Congress moves closer to eliminating the lucrative Biden-era tax subsidies that made the project financially feasible. Why it matters: Ford's argument is that by building batteries using technology licensed from China's leading battery producer, CATL, it is helping to re-shore important manufacturing expertise that was long ago ceded to China. Driving the news: Ford on Monday gave reporters a tour of the 60%-complete factory in Marshall, about 100 miles west of Detroit. The stated objective was to provide media access to the plant before "clean room" equipment is installed and tours would be off-limits. But Ford clearly wanted to also show off its $3 billion commitment to the facility ahead of an expected Senate vote this week on a budget reconciliation bill that could wipe out many electric vehicle incentives provided under the 2022 Inflation Reduction Act. Zoom in: Consumer tax credits for EV purchases get the most attention, but for manufacturers, the far more lucrative incentives come in the form of production tax credits. Companies could receive a tax credit of $35 per kilowatt-hour for each U.S.-made cell, and another $10 per kilowatt-hour for each battery pack. With an annual production capacity of 20 GWh, Ford's battery plant could potentially receive a $900 million tax credit, offsetting almost one-third of its investment. The big picture: In the quest to make more affordable electric vehicles, lithium-iron-phosphate batteries have emerged as a reliable, cost-effective solution. LFP batteries were invented in 1997 at the University of Texas, but, as often happens with U.S.-developed technology, they ended up being industrialized in China during the 2010s. Today's China's Contemporary Amperex Technology Co., Limited (CATL) is the world's leading manufacturer of LFP batteries. Ford wanted to use cheaper LFP batteries in its next-generation of EVs, but didn't have the technology, so it made the decision to license CATL's intellectual property in order to be globally competitive. What they're' saying:"LFP batteries are produced all around Europe, and the rest of the world," said Lisa Drake, Ford's vice president of technology platform programs and EV systems. "How can we compete if we don't have this technology? Somebody has to take the lead to do this," she said, adding that it will lead to homegrown innovation and the seeding of a domestic supply base. "I'm convinced this is the right thing to do for the United States," she said. Between the lines: Drake said the tax subsidies are even more important in the face of slower-than-expected EV demand. "When EV adoption slowed, it just became a huge headwind," she said. "The [production tax credit] allows us to keep on this path, and to keep going." "We don't want to back off on scaling, hiring or training in an industry we need to be competitive in the future," she said. "It would be a shame to build these facilities and then have to scale back on the most important part of it, which is the people. These are 1,700 jobs. They don't come along very often." Where it stands: The Republican-controlled Senate could vote as early as Wednesday on a budget bill that would rewrite language around EV tax credits. A House version of the bill passed last month effectively killed the production tax credits for manufacturers by severely tightening the eligibility requirements. It also specifically prohibited credits for batteries made in the U.S. under a Chinese licensing agreement — a direct hit on Ford. What to watch: A Ford spokeswoman said that draft language in the Senate version appears to be "more workable."
Wall Street Journal
5 days ago
- Business
- Wall Street Journal
Ford Still Scrambling to Get Rare-Earth Magnets
Ford Motor still faces difficulties obtaining vital magnets made with rare-earth elements, despite a deal the U.S. struck with China to ease export controls, a company executive said Monday. 'It's hand to mouth—the normal supply-chain scrambling that you have to do,' said Lisa Drake, a vice president overseeing Ford's industrial planning for batteries and electric vehicles.
