Automotive industry leaders are sounding the alarm over an emerging shortage of rare earth elements, with several European supplier plants already forced to shut down due to China’s recent export restrictions.
According to CLEPA, the European Association of Automotive Suppliers, ongoing disruptions are expected as inventories dwindle and only a fraction of export license requests have been approved by Chinese authorities. The group reports that since China imposed curbs in early April, just about 25% of submitted applications have been granted.
“These restrictions are already halting production across Europe’s supplier sector,” said CLEPA Secretary General Benjamin Krieger. “With global supply chains so deeply intertwined, the impact is immediate and severe.”
Germany’s automotive industry, in particular, is raising concerns. The German Association of the Automotive Industry (VDA) warned that the Chinese export controls on key rare earths could soon paralyze manufacturing.
“China’s restrictions are a major threat to the security of supply—not just for automakers but across multiple sectors,” said VDA President Hildegard Müller. “Even for exports with valid licenses, customs clearance is proceeding far too slowly.”
She cautioned that without swift resolution, production delays and full stoppages could become unavoidable.
The rare earth elements under restriction are essential for the production of both traditional combustion engines and electric vehicles, as well as for use in the defense and energy industries. China introduced the export controls in response to heightened U.S. tariffs imposed by former President Donald Trump.
Müller urged German and EU policymakers to take urgent diplomatic action. “This needs to be raised forcefully with the Chinese government to find a resolution before more damage is done,” she stressed.
The warnings come as global demand for rare earths and critical minerals is projected to surge due to the accelerating transition to clean energy. China currently dominates the rare earth supply chain, producing around 60% of global output.
The growing dependence on China for these essential materials is exposing vulnerabilities across highly globalized industries—especially automotive manufacturing—already strained by years of supply chain volatility.
