Workers carrying soils containing rare earth elements for export to a port of Lianyungang, Jiangsu province, China, October 31, 2010.
Stringer | Reuters
Groups in the automotive industry are increasingly concerned about a shortage of rare land.
Several European factories and production lines of automotive suppliers have already been closed due to the recent Export controlsAccording to CLEPA, the association of European automobile suppliers, the group warning of more failures as stocks are exhausted.
The German automotive industry and car leaders have also struck the alarm, saying that the highly globalized sector is very vulnerable to the disturbances of the supply chain.
The Chinese Ministry of Commerce in early April imposed export restrictions on several rare elements and magnets widely used in the automotive, defense and energy sectors. The borders were part of a response to the price increase by US President Donald Trump on Beijing products.
Some of the rare earth elements affected are vital components to the production of combustion engines and electric vehicles.
Key said On Wednesday, when hundreds of export license applications have been submitted to the Chinese authorities since early April, only about 25% seem to have been approved.
“With a deeply linked global supply chain, Chinese export restrictions are already closing production in the European suppliers sector,” said Clepa secretary, Benjamin Krieger, in a statement.
For its part, the German Association of the Automobile Industry (VDA), the main lobby in the country’s automotive industry, warned that Beijing export restrictions could soon cause the results.
“Chinese export restrictions on rare land is a serious challenge for supply security, not only in car supply chains. Although certain licenses have now been granted, this is not enough to ensure fluid production,” said VDA president Hildegard Müller, CNBC by e-mail.
“Another problem results from the slight clearance of exports for which a valid export license has been granted. If the situation does not change quickly, production delays and even production stops can no longer be excluded,” she added.
Müller reiterated the Call of the VDA to the legislators of the German and European Union “to raise this question with category with the Chinese party so that a solution to the situation can be found quickly”.
The vehicles are assembled on a line at the BMW factory in Leipzig.
Photo alliance | Photo alliance | Getty images
The demand for rare earths and critical minerals should grow exponentially in the coming years as the The clean energy transition accelerates the pace.
China, on the other hand, is the undisputed leader of the critical mineral supply chain, accounting For around 60% of the world’s production of minerals and rare land materials. US officials have previously warned That this poses a strategic challenge in the middle of the pivot of more durable energy sources.
‘We must continue to find alternatives’
Germany Bmw would have declared Wednesday that some of its supplier networks had been affected by the export limits of China, while the main national peers Volkswagen And Mercedes-Benz group The two said they knew no shortages.
“In principle, Mercedes-Benz has a strategy for all critical raw materials which are purchased directly and indirectly which guarantee long-term demand and attenuate long-term risks-knowing very well that deposits of raw materials are limited in certain regions,” said a spokesperson for the Mercedes-Benz group in a statement sent by e-mail.
The automaker added that he also worked on concepts to “considerably reduce” the amount of rare land metals per unit of vehicle. “In the future, Mercedes-Benz wants to use new materials of materials to dispense with heavy metals of rare earths such as dysprosium in our electrical records,” they said.
A Volkswagen spokesperson told CNBC that the supply of car parts containing rare earths was stable.
“Our suppliers work permanently with their subcontractors to obtain the necessary export licenses. We have received indications that a limited number of these licenses has been granted,” they said.
A spokesperson for BMW did not respond to a request for comments.
Ivan Espinosa, chief executive officer of Nissan Motor Co., speaks during an interview at the headquarters of the company in Yokohama, Japan, Thursday, May 15, 2025.
Bloomberg | Bloomberg | Getty images
It is not only European car manufacturers who count with a shortage of rare land.
Japanese Nissan said he also explored the means to minimize the impact of Chinese export controls by working with the Japanese government and the Japan Automobile Manufacturers Association.
“This is something that happens when we speak – and it is true that it will have a certain impact on the automotive industry,” said Nissan Ivanosa CEO on Wednesday.
“We must continue to find alternatives for the future, keeping flexibility and keeping our options open,” he added.
Japanese car manufacturer Suzuki engine Production in suspension of his fast car due to the rare land borders of China, Reuters reported Thursday, citing two anonymous sources. A spokesperson for Suzuki Motor was not immediately available to comment when contacted by CNBC.
