Rare Earths Ripples: Global Auto Industry Faces Supply Snags Amid China's Export Curbs

The global automotive industry is grappling with disruptions following China's restrictions on the export of rare earths, essential minerals heavily relied upon across various industries. Numerous European auto parts plants have halted production, while manufacturers like Mercedes-Benz are actively seeking alternative solutions to mitigate potential shortages.

This situation underscores China's leverage in the ongoing trade dispute with the U.S., as the nation controls close to 90% of the world's rare earths supply. Industry leaders are increasingly vocal about the heightened risks these controls pose to manufacturing outputs, pressing governments to explore viable alternatives and diversify sources.

Efforts by several automakers to develop motors with reduced rare earth content underscore the industry's commitment to lessening dependency on Chinese supplies. Nonetheless, challenges remain, with industry representatives acknowledging no immediate solutions outside potential negotiations with Beijing to ease the export controls.

(With inputs from agencies.)