China's Magnet Export Limits Threaten German Car Production

China’s export restrictions on rare-earth magnets, introduced amid trade tensions with the United States, are threatening to disrupt vehicle manufacturing in Germany, the country’s main auto lobby warns.

The Verband der Automobilindustrie (VDA) says constrained shipments of these critical materials could cause major production delays or even temporary plant stoppages. Rare-earth magnets — predominantly neodymium‑iron‑boron (NdFeB) grades — are embedded across modern vehicles, from drive and auxiliary motors to sensors, actuators and brake systems.

Although Beijing has issued a limited number of export permits to some producers, including suppliers linked to major OEMs, VDA head Hildegard Müller says that supply is insufficient to avert significant interruptions. Mercedes‑Benz and other manufacturers report close monitoring of the situation.

Because China accounts for roughly 90% of global rare-earth magnet processing capacity, the measures pose a systemic supply‑chain risk. Industry responses likely include accelerated sourcing diversification, increased recycling and design changes to reduce reliance on high‑performance rare‑earth magnets, but scaling those measures will take time and investment.