China's Rare Earth Export Ban Shakes Global Auto Industry
China's dominance of the rare earth supply chain is creating major problems for automakers worldwide. A recent export ban on heavy rare earth elements has triggered widespread concern.
Why Rare Earths Matter for Cars
Rare earths are essential components in both gas-powered and electric vehicles. They are used in catalytic converters, electric motors, batteries, and even safety features. According to Gracelin Baskaran, at the Center for Strategic and International Studies, "You are not going to manufacture a car without rare earths."
China's Control Over Processing
Although rare earth elements are not extremely rare in nature, China controls around 90% of the world's rare earth processing, and maintains a total monopoly on heavy rare earths processing. This control gives them significant leverage over the global supply chain.
The Impact and Potential Solutions
The export restrictions have already led to factory shutdowns. While some measures are being taken, such as deals to expedite shipments to the U.S., the situation remains uncertain. Long-term solutions include recycling, developing alternative sources, and promoting innovation to lessen dependence on China.
This crisis underscores the vulnerability of global supply chains and the need for diversification and proactive measures.