Highlights

• A coordinated effort is underway to build a mine-to-magnet supply chain outside China's control.
• Major investments are coming from the automotive, tech, and defense sectors.
• The U.S. Department of Defense has invested over $400 million to establish domestic rare earth magnet production.
• The initiative aims for complete independence by 2027.
• Companies like GM, MP Materials, and Stellantis are forming multi-year contracts.
• The goal is to secure U.S.-based rare earth magnet supplies, reducing reliance on Chinese producers.

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Over the past five years, a wave of high-stakes contracts has begun to redraw the rare earth magnet supply map for the automotive, defense, and even consumer electronics sectors. What was once an almost entirely China-controlled pipeline—covering more than 90% of global processing and over 80% of magnet production—now faces its first serious pushback. Automakers like GM have moved aggressively, locking in multi-year,multi-supplier deals with domestic producers such as MP Materials, VAC, and Noveon to anchor EV production in U.S.-made NdFeB magnets, while Stellantis has inked a decade-long offtake agreement with Nebraska’s NioCorp for critical magnet oxides. Tesla remains tied to Chinese supply, but Europe’s Volkswagen and Jaguar Land Rover are probing recycling and alternative sourcing. Beyond cars, Apple has signed a $500 million pact with MP Materials for U.S.-made recycled magnets. In parallel, the U.S. Department of Defense has turned into the sector’s anchor customer—backing Lynas, MP, Noveon, and others with hundreds of millions in funding, price floors, and long-term offtake guarantees to secure magnets for fighters, submarines, and advanced weapons systems. While allies in Europe and Japan are only starting to emulate these moves, the contracts forged since 2020 mark the first coordinated effort to build a mine-to-magnet supply chain outside China’s reach, with both commercial giants and the Pentagon betting big on a strategic realignment that could reshape industrial and military capabilities by the decade’s end.

Automobile OEMs

General Motors (GM)

They have aggressively secured domestic rare earth magnet supplies in recent years. In late 2021, GM entered a binding long-term deal (opens in a new tab) with MP Materials to source U.S.-made neodymium-iron-boron (NdFeB) magnets for “more than a dozen” electric models on GM’s Ultium EV platform. MP Materials agreed to build a new magnet factory in Fort Worth, Texas (operational 2023) with capacity for ~1,000 tonnes of NdFeB magnets per year (enough for ~500,000 EV motors annually). In parallel, GM partnered with Germany’s

VACUUMSCHMELZE (VAC) (opens in a new tab) to establish a U.S. magnet plant. GM and VAC signed an agreement (finalized in 2022) for VAC’s U.S. subsidiary e‑VACMagnetics to produce magnets for GM’s EV motors, targeting about 1,000 tons of magnets per year starting in 2024. Most recently, in August 2025, GM announced a multi-year contract with Noveon Magnetics, a Texas-based startup that is the only U.S. producer of sintered NdFeB magnets. Under this deal, Noveon began supplying magnets (as of July 2025) for GM’s full-size trucks and SUVs. With the Noveon agreement – alongside the MP Materials and e-VAC deals – GM expects the majority of its rare earth magnets to come from domestic sources, reducing its reliance on China.

Tesla – Chinese Magnet Supply Agreement

Tesla, another major EV maker, has relied on Chinese magnet suppliers. Notably, on 21 September 2020, Tesla signed a procurement agreement with JL MAG Rare-Earth Co. of China to supply NdFeB magnets, with purchase volumes tied to Tesla’s orders as cited via Asian Metal (opens in a new tab).

This supply agreement helped JL MAG expand in the EV market. (Tesla has since announced plans to reduce rare earth usage in future motors, but as of the early 2020s, it continued to source NdFeB magnets for its existing models.)

Stellantis (Peugeot/Chrysler/Fiat) – Offtake with U.S. Rare Earth Project

In 2023, multinational automaker Stellantis signed a rare earth offtake term sheet (opens in a new tab) with NioCorp, a company developing the Elk Creek mine/refinery in Nebraska. The July 2023 term sheet envisions a definitive 10-year supply contract for specified volumes of neodymium-praseodymium oxide (NdPr), dysprosium oxide, and terbium oxide from NioCorp’s future U.S. production. Stellantismay also make a strategic investment in NioCorp’s project. The deal is aimed at securing non-Chinese magnet raw materials for Stellantis’ EV supply chain, contingent on NioCorp successfully financing and building its facility. Stellantis and NioCorp also plan to identify a magnet manufacturing partner to eventually turn those oxides into finished magnets for Stellantis vehicles.

Other Automakers – Efforts and Challenges

Other carmakers have belatedly taken steps to shore up magnet supplies.

Ford Motor Co. did not have a known dedicated magnet supply contract as of 2024, and this contributed to serious disruptions in 2025. After China tightened rare earth export licensing in April 2025, Ford experienced “hand-to-mouth” magnet shortages – even briefly idling its Chicago assembly plant for a week in May 2025 due to a lack of rare earth magnets as Rare Earth Exchanges (REEx) reported. China later granted temporary export licenses to suppliers for Ford and other U.S. automakers, but Ford’s CEO still warned, “We have had to shut down factories. It’s day to day” regarding magnet supply. European and Japanese automakers similarly remain heavily dependent on Chinese magnet makers.

For instance, Volkswagen (VW) sources magnets from Chinese firms – and Chinese authorities in 2025 granted export permits to at least four magnet manufacturers that supply VW per Reuters (opens in a new tab) and other reports. This allowed VW’s suppliers to resume magnet shipments amid new export rules. European OEMs are exploring alternatives (e.g., stockpiling or recycling), but few have finalized direct offtake deals.

One notable initiative is Jaguar Land Rover (JLR) investing in recycling: in 2025 JLR’s venture arm put $2 million into Canadian startup Cyclic Materials (opens in a new tab) to develop rare earth magnet recycling capacity, alongside backing from BMW and others. This reflects an effort to cultivate secondary sources of magnet material for future use, though it’s an investment rather than a supply contract.

Wind Power OEMs

Like GE and Siemens Gamesa, electronics firms also rely on NdFeB magnets. While not the primary focus here, it’s worth noting a first-of-its-kind deal by Apple Inc. in 2025 and reported by REEx: Apple signed a $500 million, multi-year agreement with MP Materials to procure rare earth magnets made in the USA entirely from recycled material. As part of that deal, Apple and MP are building a new rare-earth recycling facility in California and expanding MP’s Texas magnet factory to produce magnets for Apple devices. This illustrates that beyond automotive and defense, other industries are now forging agreements to secure rare earth magnets with domestic and sustainable sources.

Defense and Government Rare Earth Contracts

U.S. Department of Defense (DoD) Supply Chain Initiatives

The defense sector’s approach has been largely driven by government contracts aimed at fostering a domestic “mine-to-magnet” pipeline. Since 2020, the DoD has invested over $400 million (opens in a new tab) in rebuilding a U.S. rare earth supply chain. A key partner has been Lynas Rare Earths of Australia: In July 2020, the DoD awarded Phase 1 funding to Lynas (and to MP Materials) to design new U.S.-based separation facilities for critical rare earths. Lynas, in tandem with Texas-based Blue Line Corp, completed designs for a Heavy Rare Earth separation plant to process elements like dysprosium and terbium (vital for high-temperature magnets). In June 2022, the DoD then signed a follow-on contract worth $120 million with Lynas to build a commercial-scale heavy rare earth separation facility in Texas, expected to be operational by 2025. This plant – the first outside China capable of separating heavy rare earths – will produce the terbium, dysprosium, etc. needed for advanced magnet alloys. (Notably, the Texas site will be combined with a light rare earth separation plant partly funded under the Defense Production Act, creating a full-spectrum U.S. rare earth refinery.)

MP Materials & DoD “Mega-Deal” (2025)

In a landmark July 2025 agreement, MP Materials announced a public–private partnership with the DoD to supercharge U.S. magnet production. The Pentagon will invest a multi-billion-dollar package into MP, including $400 million for equity (making DoD MP’s largest shareholder at ~15%) and loans, in exchange for long-term supply commitments. Crucially, DoD is providing a 10-year offtake guarantee – ensuring that 100% of the magnets produced at MP’s planned new “10X” magnet factory (opens in a new tab) (a second, much larger facility launching by 2028) will be purchased for defense and commercial needs. The DoD also locked in a price floor of $110/kg for MP’s neodymium-praseodymium (NdPr) oxide over 10 years – roughly double current Chinese prices – to stabilize MP’s revenue against China’s market manipulations.

This partnership will help MP boost its magnet output to 10,000 tons/year by 2028 (an order of magnitude increase) and add heavy rare earth separation at its Mountain Pass site. Defense leaders hailed it as a “game-changer” to break China’s stranglehold on magnet materials. MP Materials' stock price has not surprisingly surged.

Domestic Magnet Manufacturing Contracts

The DoD has directly funded several magnet manufacturing projects to support defense needs. For example, through its Industrial Base and MCEIP programs, DoD awarded Noveon Magnetics $28.8 million (opens in a new tab) to establish a rare earth magnet factory in Texas, now producing qualified NdFeB magnets from U.S.-sourced or recycled materials for defense applications. Similarly, TDA Magnetics (a smaller U.S. firm) received $2.3 million to develop (opens in a new tab) the capability to supply magnets into DoD supply chains. The largest award – $94.1 million – went to the U.S. subsidiary of VAC (opens in a new tab) (e‑VAC Magnetics) to build a full-scale sintered NdFeB magnet plant in South Carolina by 2025, including domestic production of the requisite rare earth metal alloys. These projects, alongside MP and Lynas, form a concerted effort to ensure that by 2027 the U.S. military can source all its magnet needs from domestic or allied producers (opens in a new tab). But frankly, this will likely occur with near flawless execution.

Defense OEMs and Supply Implications

While prime defense contractors (Lockheed Martin, Raytheon, etc.) have not publicly disclosed direct contracts with magnet vendors, they stand to benefit from the above initiatives. Modern weapons are enormously magnet-intensive – each F‑35 fighter contains over 920 lbs of rare earth elements in its motors, sensors, and actuators, and a single Virginia-class submarine uses about 9,200 lbs. In the past, U.S. defense programs were forced to source magnets from China (e.g., Chinese magnet parts were found in F-35s and missiles), leading to security waivers and supply vulnerabilities. The new agreements aim to close that gap. For instance, once e-VAC’s and MP’s U.S. factories come online, a dedicated supply of American-made NdFeB magnets can flow to defense contractors for systems like jet engines, precision-guided munitions, radar, and electric ship drives. The Pentagon’s 2024 strategy explicitly seeks a fully “mine-to-magnet” domestic supply chain for all defense needs by 2027 (opens in a new tab).

In sum, the U.S. government has effectively become the anchor customer in magnet supply contracts – using tools like offtake agreements, price guarantees, and direct funding – to ensure defense OEMs have secure access to rare earth magnets outside of Chinese control.

International Defense Efforts

Outside the U.S., similar contracts are nascent. Allied governments in Europe and Asia have begun funding projects (e.g., EU and Japan support Lynas, and Japan’s NEDO backed Hitachi’s (Proterial) magnet R&D), but specific OEM-to-supplier deals are rare. One example is the UK’s Ministry of Defence exploring magnet recycling and the EU’s efforts to stockpile magnet materials. China’s dominance remains so pronounced (>90% of processing and >80% of magnet production according to a recent Reuters account (opens in a new tab)) that Western defense firms until recently had little choice but Chinese supply. The contracts detailed above mark the first real shift, laying groundwork for long-term partnerships between defense systems integrators and non-Chinese magnet makers.

Sources

• GM–MP Materials supply agreement and magnet factory announcement mpmaterials.com (opens in a new tab) electrive.com (opens in a new tab); GM–VAC magnet plant plans electrive.com (opens in a new tab); GM’s deals with Noveon, MP, e-VACainvest.com (opens in a new tab).
• Tesla and JL MAG Rare-Earth supply contract (Sept 2020)asianmetal.com (opens in a new tab).
• Stellantis & NioCorp 10-year rare earth offtake term sheet (July 2023)stellantis.com (opens in a new tab).
• Ford magnet shortage and factory shutdown (2025)reuters.com (opens in a new tab); China’s temporary export licenses for Ford/othersreuters.com (opens in a new tab).
• Volkswagen suppliers’ export permits amid China’s curbs reuters.com (opens in a new tab). Jaguar Land Rover’s investment in Cyclic Materials (recycling startup)electrek.co (opens in a new tab).
• Apple–MP Materials $500 M magnet supply & recycling deal (2025)esgtoday.com (opens in a new tab)apple.com (opens in a new tab).
• DoD contracts: Lynas heavy rare earths plant ($120 M, 2022)reuters.com (opens in a new tab); initial Lynas/MP Phase 1 awards (2020) agmetalminer.com (opens in a new tab)ag metalminer.com (opens in a new tab). DoD–MP Materials 2025 partnership (price floor and offtake terms)reuters.com (opens in a new tab) mpmaterials.com (opens in a new tab).
• DoD-funded magnet manufacturing (Noveon $28.8 M, TDA $2.3 M, e-VAC $94.1 M)defense.gov (opens in a new tab).
• Rare earth magnet needs in F-35 and submarines defense.gov (opens in a new tab); DoD strategy for a domestic mine-to-magnet supply chain defense.gov (opens in a new tab).
• China’s ~90% share of RE processing and impact on automakers and defense reuters.com (opens in a new tab).
• Rare Earth Exchanges multiple articles