Auto Industry Crash on Horizon from Lack of Rare Earth Minerals & Magnets?

Whether electric vehicles or gas-powered cars, production could come to a grinding halt in the US and Europe soon. Word on the street is that the escalating trade combativeness between the West and China has led to China putting restrictions on rare earth minerals and magnets. China controls more than 90% of the rare earth mineral supply chain.

“Several European car part manufacturers have already halted production lines according to the European Association of Automotive Suppliers (CLEPA),” The Verge writes. “Companies that wish to export the materials now require a license, and those have been hard to come by — Nikkei reports that only 25 percent of requests have been approved. According to The New York Times that’s had a knock on effect, with some magnet manufacturers in China pausing production while waiting for exports to resume, which could cause more shortages in the future.”

Yikes. That’s not good. Of course, the Chinese automotive market is fine, but everyone else….

Notably, this affects more than cars. It can also affect robotics, military defense systems, and other industries, but it’s especially going to hold up the electric car industry since rare earth metals are key components of electric motors. That said, they are even used in catalytic converters in car seats, and the auto industry overall looks like it could shut down temporarily if the rare earth supply chain doesn’t get going again.

This could get nasty.