China Rare Earths & Auto Industry Impact
- Berlin — Automakers and suppliers are scrambling to adapt as china's restrictions on rare earth exports create critical mineral shortages.
- China, which produces about 90% of the world's rare earths, imposed export controls in april, affecting industries from automakers to aerospace and military contractors.
- Ford Motor Company CFO Sherry House noted the added administrative burdens caused by the export controls.
China’s rare earth export controls are already disrupting the auto industry, forcing European auto parts plants to halt production, according to recent reports. This strategic move by China, which controls approximately 90% of the world’s rare earths, is creating critical mineral shortages and impacting global supply chains. Mercedes-Benz is actively considering stockpiling to mitigate thes supply chain vulnerabilities. Ford also faces increased administrative burdens due to these new export controls. The EU is responding, aiming to reduce reliance on single countries. News Directory 3 is tracking these rapid developments. What does this mean for the future of auto manufacturing and global trade? Discover what’s next …
china Rare Earth Export Controls Disrupt Automakers
Updated june 5, 2025
Berlin — Automakers and suppliers are scrambling to adapt as china’s restrictions on rare earth exports create critical mineral shortages. Some European auto parts plants have already halted production. Mercedes-benz is exploring options such as building stockpiles to buffer against supply disruptions.
China, which produces about 90% of the world’s rare earths, imposed export controls in april, affecting industries from automakers to aerospace and military contractors. The move is seen by some as leverage in ongoing trade tensions.
Ford Motor Company CFO Sherry House noted the added administrative burdens caused by the export controls. “It just puts stress on a system that’s highly organized with parts being ordered many weeks in advance,” House said at a Wednesday investor conference. “We’re managing it.It continues to be an issue, and we continue to work the issues.”
EU Trade Commissioner Maros sefcovic said he and his Chinese counterpart agreed to clarify the rare earth situation. EU Commissioner for Industrial Strategy Stephane Sejourne emphasized the need to reduce reliance on single countries, particularly China. Brussels has identified 13 new projects outside the bloc to diversify metal and mineral supplies.
CLEPA, Europe’s auto supplier association, reported that several production lines have shut down due to supply shortages. only a quarter of the hundreds of export license requests made by auto suppliers as early April have been granted,with some rejected on procedural grounds,according to CLEPA.
While the export controls coincided with broader trade retaliation, they apply globally, causing concern among business leaders. Joerg Burzer, mercedes-benz production chief, said the company is discussing building “buffers” with suppliers. BMW reported some supplier network disruptions but said it’s plants are operating normally.
Mathias Miedreich, a board member at ZF Friedrichshafen, said the company has largely secured needed permits from China. However, he expressed concern that the situation could mirror the COVID-19 pandemic’s computer chip shortage, which severely impacted vehicle production.
What’s next
Automakers and suppliers will likely continue seeking option sources for critical minerals and adjusting supply chain strategies to mitigate the impact of China’s export controls. Further policy developments from both China and the EU are expected.