Global automakers on edge as China tightens grip on rare earth exports

LONDON/BERLIN: With Beijing’s stricter export controls set to kick in on November 8, automakers are bracing for impact. The numbers are stark: China currently accounts for 70% of global rare earth mining, 85% of refining, and 90% of metal alloy and magnet production, according to consultancy AlixPartners.

“The situation is very tense,” said Nadine Rajner, CEO of German supplier NMD. “Global demand is rising fast, but real alternatives to Chinese exports are still extremely limited.”

Scrambling for solutions: AI, recycling, and innovation

Facing a potential chokehold, automakers and suppliers are moving quickly to cut their dependence on Chinese materials. Some—including GM, BMW, Renault, ZF, and BorgWarner—are shifting toward electric motors that use fewer or even no rare earth elements.

British tech firm Monumo is using AI to help manufacturers reduce their reliance on these materials. According to CEO Dominic Vergine, their system can cut rare earth use by an average of 24%.

Recycling is also gaining traction as a potential solution. In France, Neutral—a startup backed by Renault—recycles rare earths from about 400,000 vehicles per year. But scaling up remains a huge challenge. “The challenge is scaling up these activities fast enough,” admitted CEO Jean-Philippe Bahuaud.

Still, with China holding a near-total monopoly on heavy rare earth refining (99.8%), these efforts are more of a long game than a quick fix.

A global power play—and a price war

The fight for mineral independence is also playing out on the world stage. Just this week, Donald Trump and Australian PM Anthony Albanese signed a deal aimed at boosting U.S. investment in Australia’s rare earth mining sector. It’s part of a broader push to curb China’s overwhelming influence.

But competing with China isn’t easy. It continues to undercut rivals on price, making it tough for alternative suppliers to gain traction. “The Chinese can always undercut them,” said Andy Leyland of SC Insights. That puts automakers in a bind: do they invest in more expensive, rare earth-free technologies—or risk relying on a volatile supply?

Toyota’s VP of Purchasing in North America, Ryan Grimm strongly believe that they can be shut down in two months—the entire auto industry. And this may just be the beginning. “This is not the end of export controls,” warned Jan Giese of rare earth trading firm Tradium.

As time ticks down to November 8, automakers are stockpiling materials, racing to innovate, and navigating a geopolitical tightrope. But one thing’s clear: the industry’s reliance on rare earths—and China’s dominance in the sector—is becoming one of its greatest vulnerabilities.