Race for Rare Earths: Global Automakers Brace for Chinese Controls
Global automakers are concerned about Chinese export controls on rare earths, essential for various car parts, fearing potential shortages and plant closures. China dominates the rare earths market, leading industries to seek alternative sources and develop rare earth-free technologies, amid rising geopolitical tensions.
Facing the looming threat of Chinese export controls on rare earths, global automakers are scrambling to secure these critical materials. Rare earths power essential car parts, including those in electric vehicles (EVs), making them indispensable to the industry. With China controlling up to 90% of rare earths production, the auto industry braces for potential shortages and operational disruptions.
The situation is exacerbating as China has further tightened its grip with newly expanded export curbs. Companies are experiencing global supply shortages, compelling manufacturers like General Motors and BMW to develop EV motors that require little to no rare earth content. Despite these efforts, alternative sources remain limited, as China continues to dominate the global refining capacity for these strategic minerals.
While efforts are underway to reduce dependence on Chinese rare earths, significant challenges persist, including developing new mines and refining capabilities outside China. Experts highlight the strategic advantage held by China, as they can consistently offer competitive pricing, presenting a risky investment for automakers attempting to innovate. As geopolitical tensions heighten, automakers must navigate this complex landscape cautiously.
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