Berlin/London/Detroit (Reuters) -Frank Icard, CEO of the German magnet maker, made a flood of calls in recent weeks. Automobile manufacturers and angry suppliers were to find alternative sources for the magnet, which is short of the show due to Chinese export restrictions.
Some have told Icard that their factories could be known by mid -July without reserve magnet supplies. “The entire auto industry is in a state of complete panic,” said Ikard, CEO of MagnosPhere, based in Troisdorf. “They are ready to pay any price.”
CEOs of cars have been pushed again to their war rooms, as they are concerned that the narrow export controls in China on rare Earth magnets-mainly required to make cars-can paralyze production. US President Donald Trump said on Friday that Chinese President Xi Jinping agreed to allow Earth’s minerals and rare magnets to flow to the United States. An American commercial team for talks is scheduled to meet in London on Monday.
The industry is concerned that the rare land situation can infiltrate into the shock of the third huge supply chain within five years. Lack of semiconductors wiped millions of cars from the plans of car manufacturers production, from 2021 to approximately 2023.
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These crises prompted industry to fortify the supply chain strategies. Executive officials gave priority to backups for the main components and reconsidered the use of inventory in time, which provide money but can leave them without stocks when the crisis explodes.
Based on Eicard’s calls, although “no one knew from the past,” he said.
This time, with a rare bottleneck tightening, the industry has a few good options, given how China dominates the market. The fate of the assembly lines of car manufacturers has been left for a small team of Chinese bureaucrats because it reviews hundreds of requests for export permits.
The Clepa Motors Association in the region said that many European string factories have already been closed, with more regular interruptions.
“Urgently or later, this will face everyone,” said the Secretary -General of Calibia Benjamin Crager.
Cars today use rare ground-based engines in dozens of ingredients-side mirrors, sibros, oil pumps, windshield spaces, fuel leakage sensors and braking sensors.
Alexpartners Consulting said that China dominates up to 70 % of rare global land mining, 85 % of refining capacity and about 90 % of rare mineral alloy and magnet production. The average electric car uses about 0.5 kg (just over 1 pounds) of rare Earth elements, and a fossil fuel uses half of that, according to the International Energy Agency.
China has previously discharged, including in the 2010 conflict with Japan, during which it photographed rare Earth exports. Japan had to find two alternative suppliers, and by 2018, China represented only 58 % of rare land imports.
“China had a rare card to play whenever they wanted,” said Mark Smith, CEO of Niocorp, who is developing a rare project in Nebraska.
Throughout the industry, auto companies are trying to open China for rare land magnets, or even develop magnets that do not need these elements. But most efforts are years away from the required scale.
“It is really about determining … and finding alternative solutions” outside China, “Joseph Palmei, head of the supply chain management, said at a conference in Detroit last week.
Auto industry companies including General Motors (General Motors) And BMW (Bmw.de), Main suppliers such as ZF and Borgwarner. It works on engines with rare low content to scratch. But a few of them managed to expand the scope of production enough to reduce costs.
The European Union launched initiatives, including the critical raw material law to enhance rare European sources. Noah Parkin, the chief adviser to the Rodium Group, an American research center focusing on China, said he had not moved quickly enough.
Even players who have developed marketing products are struggling to compete with Chinese producers for the price.
David Bandar, a co -chair of a magnet recycling specialist in German minerals, said he only works with a capacity of 1 % and will have to close next year if sales did not rise.
Niron, based in Minneapolis, has developed magnets free of rare land and raised more than $ 250 million of investors including GM and Stellantis (pressureMagna car supplier (MGA).
“We have seen a step change in attention from investors and clients” since the export controls in China entered into force. He plans a billion -dollar factory that is scheduled to start production in 2029.
England -based Warwick Acoustics has developed its headquarters, which is expected to show speakers free of rare land in a luxury car later this year. CEO Mike Grant said the company is holding talks with dozens of other car manufacturers, although it is not expected that speakers are available in the prevailing models for about five years.
With the long -term car companies exploring, they are left to defend to avoid closing the imminent factory.
Automobile companies must know any of their suppliers – the smallest of the links that reach the supply chain – you need export permits. Mercedes -Benz speaks, for example, to suppliers about building rare earth stocks.
Analysts said that the restrictions could force the car manufacturers to make cars without certain parts and stop them until they are available, as did GM and others during the semiconductor crisis.
The adoption of car manufacturers on China does not end with rare ground elements. A report from the European Commission for 2024 said that China controls more than 50 % of the global offer of 19 main raw materials, including manganese, graphite and aluminum.
And any of these elements can be used as a financial lever by China. “This is just a warning shot,” he said.
(Participated in the reports of Christina Aman, Victoria and Al -Darssi in Berlin, Calia Hall in Detroit and Nick Carrey in London; she participated in additional reports from Isabelle Carlson and Milan will contribute to Brucelli, Golio Biovatakari in Milan and Noriko Chiroso in Austin; edited by Richard Chang)
