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China's latest export controls on rare earth minerals could cause stops in automotive production, with stocks of essential magnets that should run out in a few months if Beijing completely stifles exports.
Beijing has expanded its export restrictions to seven rare Vital elements and magnets for electric vehicles, wind turbines and fighter planes in early April in retaliation for the steep prices of US President Donald Trump on China.
Government representatives, traders and car executives said that with estimated stocks between three and six months, companies would be to store more equipment and find alternative supplies to avoid major disturbances.
Jan Giese, a tradium trader, based in Frankfurt, warned that customers had been caught and that most of the car groups and their suppliers seem to contain only two to three months of magnets.
“If we do not see deliveries loving to the EU or to Japan at that time or at least nearby, then I think we will see real problems in the automotive supply chain,” said Giese.
China's latest controls have focused on rare “heavy” and “medium” earths that allow high performance magnets that can withstand higher temperatures, such as dysprosium, terbium and samarium. These are vital for military applications such as jets, missiles and drones, as well as for rotors, engines and transmissions that are strongly in electric and hybrid vehicles.
A senior automotive framework said that critical mineral restrictions would be “consecutive” for Tesla and all other car manufacturers, describing export controls as a “7 or 8” on a scale of 1 to 10 in terms of gravity.
“It is a form of reprisals where the Chinese government can say” OK, we are no longer going to tat-tat on the rate rate, but we will injure you in the United States and we will encourage companies to plead with your own origin governments to change the tariff policy, “he said.
Rare land metals are commonly found in the crust China Commander of a monopoly almost on a treatment of rare earths.
The rare “light” earths, such as neodymium and praseodymium, used in larger quantities in magnets have not been targeted, giving Beijing a “large threat vector” to extend the controls if the trade war is intensifying, said Cory Combs de Trivium based in Beijing, a consulting firm.
Beijing controls require exporters to obtain licenses for each shipping of equipment abroad and have expanded their scope to prohibit re-export to the United States. However, the application of borders – which covers a group gradually expanding critical minerals since 2023 in response to American blocks on Chinese access to flea technology – was far from universal.
Chinese exporters have already declared force majeure on rare earth cargoes and magnets abroad and have withdrawn the equipment for sale on the market, masking the price of already opaque products more.
Japan and other nations pinpoint hopes on the description of the grip of China on the strong rare earths through the Lynas of Australia, which should extend its Malaysian treatment site to produce dysprosium and terbium by mid-2025.
“The storage elements of rare land is not enough to avoid the potential turbulence of automotive supply chains,” said a Japanese government official, who added that national stocks should provide additional relief beyond two to three months of supplies held by car manufacturers.
“The problem is whether we can build the new alternative supply chain in time for our survivor storage,” he added.
It has not yet been clear to the Chinese government's announcements since April 2, how Beijing plans to implement the latest export controls.
Export controls are available while China is faced with the drop in raw materials for strong rare land due to the civil war in Myanmar, analysts said, which means that an export block would strengthen domestic supplies.
Experts have noted that in recent years, China has been reluctant to block expeditions that would damage its own economic interests, such as gallium, but expeditions have been strongly hampered other metals such as antimony, which is used to make balls.
“The crucial question is how long they will take to treat export licenses,” said Giese.
