China’s dominance over global supply chains is beginning to hurt automakers.
On April 4, the country cut off exports of a class of minerals called “heavy rare earth elements” and threw the global automotive industry into panic.
Rare earths are 17-element course These applications are essential in all kinds of applications – everything from fighter jets and submarines to smartphones and devices. you can Even find them in sports equipment, such as tennis rackets and baseball bats.
Of course, they are also essential for Hyundai. Gas cars use them to filter contamination through the vehicle’s catalytic converter. Electric cars use them in electric motors and batteries.
“Rare earths are really crucial, not just electric cars,” said Gracelin Baskaran, director of the Critical Mineral Safety Program at the Center for Strategic and International Studies. “They are in all parts of your seat belt, steering wheel, electrical components. You are not building cars without rare earths.”
Rare earths are classified into further categories according to their atomic weight. Light rare earths are easier to source. China completely monopolizes the middle and heavy people. China controls 70% of the world’s rare earth mines. But what it really dominates is processing.
The name “Rare Earth Element” is somewhat misleading – these elements are not that rare in themselves. What makes them “rare” is the complex and difficult process of separating them from embedded rocks. China controls about 90% of the world’s rare earth processing, and There is a comprehensive monopoly on the processing of heavy rare earths.
Bascalan said China has been tightening controls on several key minerals the world provides for the world since at least 2023.
Still, export restrictions on April 4 still shocked the automotive world.
“It’s everywhere,” said Dan Hearsch, managing director of Alixpartners. “No one has any time to react to it. I mean, in a few weeks, all the material in all the pipes has gone out.”
European automaker Close the factory. Ford must Idle production Its popular Explorer SUV.
This month, China began allowing some companies that supply parts to certain automakers. The Trump administration said this week It has reached an agreement to speed up the transport of rare earths and magnets
The durability of these deals is not yet known.
“We haven’t left the woods yet,” Bascalan said. “Between tariffs and mineral restrictions, there is a lot of volatility in U.S.-China relations. We’ve seen China intensify restrictions in two years. Rare earths are just the latest planet.”
If China cuts access again, there are long-term solutions: for example, recycling, developing other sources and innovation. The crisis may even prompt the industry to take action to reduce its dependence on China.
However, this rare crisis is just the latest in supply disruptions in the past few years. Rumors say things could get worse.
“Today is a rare earth.” “But tomorrow it can and will be something else we may not have thought of, maybe not even that valuable, and suddenly it won’t.”
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