Germany’s automotive industry group VDA joined other carmakers to sound the alarm that the recently introduced curbs and controls on China’s exports of rare earth elements and magnets could disrupt and even idle manufacturing lines.
“If the situation is not changed quickly, production delays and even production outages can no longer be ruled out,” Hildegard Mueller, head of VDA, told Reuters this week, in yet another warning from the automotive industry about the impact of China’s policy on the global automotive supply chains.
Last month, the Alliance for Automotive Innovation – which represents GM, Toyota, Volkswagen and other major car manufacturers – warned of production reductions and even shutdowns of assembly lines without access to magnets and to rare earths.
“Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras,” the alliance and the Vehicle Suppliers Association, MEMA, wrote in a letter to the Trump Administration carried by Reuters.
Electric vehicle production will also be affected by the Chinese export curbs. Indian Bajaj Auto, for example, last week warned that delays in supply of rare earth magnets could “seriously impact” its EV production next month.
Beijing has strengthened its dominance in the supply chains of critical minerals and rare earth elements despite a push by Western nations to reduce reliance on China.
The heavily concentrated supply of critical minerals in a handful of countries and China’s export controls are raising the risk of “painful disruptions” in the market, the International Energy Agency (IEA) warned last month in its annual report, Global Critical Minerals Outlook.
Despite well-supplied markets, export controls and rising supply concentration are raising the risks to the security of supply.
The IEA finds that currently, more than half of a broader group of energy-related minerals are subject to some form of export controls.
By Tsvetana Paraskova for Oilprice.com
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