Automakers say China’s rare earth magnets stranglehold could cause massive production issues in weeks
Automakers are only about two years past the global semiconductor shortage that squeezed production.
Now, a new potentially major supply issue is brewing, caused by China’s control over rare earth magnets.
Rare earth magnets are used throughout modern vehicles, including in motors, windshield wipers, doors, and window switches. China, which controls about 90% of the world’s supply of the elements, is said to have excessively slowed its export since early April.
According to reporting from The Wall Street Journal, impending factory shutdowns are causing some US automakers to weigh shocking solutions like moving EV motor production to China or even shipping US-built motors to China, installing the magnets, and shipping them back.
Last month, the shortage caused a Ford plant in Chicago to halt production for a week.
“It’s a major issue for the industry. I don’t think the industry is very well prepared to deal with it,” Bank of America’s senior auto analyst, John Murphy, said at a virtual media event on Wednesday. “Over time, if it’s not solved, it’s going to become a very expensive problem. I mean, I think it’s kind of a new potential shock to the system.”
Rare earth magnets are used throughout modern vehicles, including in motors, windshield wipers, doors, and window switches. China, which controls about 90% of the world’s supply of the elements, is said to have excessively slowed its export since early April.
According to reporting from The Wall Street Journal, impending factory shutdowns are causing some US automakers to weigh shocking solutions like moving EV motor production to China or even shipping US-built motors to China, installing the magnets, and shipping them back.
Last month, the shortage caused a Ford plant in Chicago to halt production for a week.
“It’s a major issue for the industry. I don’t think the industry is very well prepared to deal with it,” Bank of America’s senior auto analyst, John Murphy, said at a virtual media event on Wednesday. “Over time, if it’s not solved, it’s going to become a very expensive problem. I mean, I think it’s kind of a new potential shock to the system.”
