News
Last week, China rolled out a new set of restrictions on its rare earth material exports, disrupting the global supply chain and plunging U.S. carmakers into further uncertainty.
China, which processes around 90% of the world’s rare earth materials, has clamped down on the flow of these resources used in the manufacturing of tech products, smartphones, solar panels and automobiles. The new restrictions will come into effect on 8 November.
The decision comes ahead of the proposed meeting between U.S. President Donald Trump and Chinese leader Xi Jinping later this month.
Beijing contends that the tighter restrictions are part of a strategy to “safeguard national security,” as many of the restricted materials are used overseas in defence and weapons manufacturing.
Rare-earth material manufacturers will now have to seek permission from the Chinese government before exporting their goods -a lengthy process that often ends in rejection.
Among the materials facing tighter restrictions are lithium batteries, a key component in the manufacturing of electric vehicles. The decision comes after China already clamped down on exports of rare-earth magnets, used to produce everything from electric motors to windscreen wipers, back in the spring.
The U.S. EV market has already faced significant strain this month following the end of the EV tax credit, which entitled U.S. consumers to a $7,500 subsidy for newly purchased EVs.
The blow marks the latest in a long succession of challenges for the U.S. electric vehicle market. Ford CEO, Jim Farley, remarked on the end of the EV tax credit, calling the decision “a game changer” that he predicted could see U.S. EV sales falling from about 10% to 5% of the market.
While some manufacturers are winding down EV production and reviving the production of internal combustion engine (ICE) vehicles, others are adapting to the increasingly precarious electric landscape.
One such automaker is GM, which began investing in domestic rare-earth manufacturing back in 2021 in an effort to reduce its reliance on the Chinese market.
GM will now be the only U.S. automaker with a direct supply of rare-earth magnets from multiple American factories.
Among its suppliers are German-based VAC and MP Materials, the largest rare-earth miner in the U.S.
GM’s decision to invest in more expensive U.S.-made batteries may have appeared risky back in 2021, but it now represents an impressive stroke of foresight in light of China’s latest restrictions.
Also in the news:
Two-wheel battery swapping ecosystems to deploy in Latin American cities
Osprey Charging make efforts to increase EV charging infrastructure in Bedford
Is extreme fast-charging tech as important as infrastructure roll-out for the EV transition?
Tata Motors to announce UK as new site for £4bn gigafactory
All western foresight committees are not being listened too, because it does not win votes. Therefore the west is having to suffer the consequences of not doing their homework, avoiding difficult decision making for the safety of their long term future.