China expanded rare-earth export controls, threatening EV supply chains and prompting automakers to diversify suppliers and boost recycling.
China tightened export rules for rare-earth elements on Thursday, broadening controls announced in April and clarifying licensing and classification requirements. The measures affect materials used in high-performance permanent magnets and alloys—notably NdFeB and SmCo—alongside compounds critical to EV motors, wind turbines, consumer electronics and defence technologies. The April restrictions already tightened global supplies; the new clarifications add procedural friction and are likely to increase lead times and costs for firms dependent on Chinese separation and processing capacity. Automakers with significant Chinese operations, such as Tesla, face less immediate disruption, while companies pursuing domestic supply chains—exemplified by efforts from Lucid—are accelerating mining, refining and recycling initiatives. Industry responses will include qualifying alternative suppliers, redesigning motors to reduce reliance on scarce elements, expanding magnet recycling, and building strategic inventories. Procurement and engineering teams should prioritize supplier diversification, material-substitution testing, and updated risk models to manage price volatility and availability constraints as the new rules take effect.