Rare Earths Crunch: Europe's Auto Industry Feels the Strain

European auto parts factories are grappling with halted production as China enforces export restrictions on rare earths, deepening supply chain woes linked to these essential minerals. Mercedes-Benz is exploring protective measures to avoid shortages, reflecting broader industry apprehension.

Efforts to address dependency on China were underscored by EU trade commissioner Maros Sefcovic's commitment to resolve the rare earth issue swiftly. Meanwhile, Mercedes-Benz suppliers are exploring stockpiling tactics to safeguard against disruption, although shortages haven't yet impacted its operations.

Amidst reliance challenges, companies like BMW and associations like CLEPA reveal strains within supply networks, prompting international industries to re-evaluate sourcing strategies. Political tensions underpin this economic dilemma, as U.S. automakers lobby for solutions, while some firms attempt independent resolutions.

(With inputs from agencies.)