Highlights
- Harvard's Dr. Buckberg exposes how China's 91% control over rare earth magnet materials and 60% of magnet production creates a strategic chokehold on U.S. auto manufacturing, forcing production stoppages when exports are halted.
- China's 2025 export ban on seven key rare earths idled Ford production lines, proving that U.S. EV policy and tariffs fail without diversified REE processing capacity outside Chinese control.
- The study concludes U.S. automotive security requires immediate investment in domestic REE mining, separation, and magnet production, plus allied coordination to break China's decades-long supply chain dominance.
A new working paper from Dr. Elaine Buckberg (opens in a new tab) of Harvard University’s Mossavar-Rahmani Center for Business & Government, titled “Driving Security? U.S. Auto Industrial Policy in a Changing World” (M-RCBG Working Paper 2025.267), offers a sharp and timely examination of how the United States’ auto-industry strategy collides with—and is ultimately constrained by—China’s overwhelming dominance in rare earth element (REE) processing, magnet manufacturing, and EV/battery supply chains.
Table of Contents
Buckberg’s analysis, drawing on global trade data, policy trajectories, and national security case studies, concludes that U.S. auto security cannot be disentangled from China’s chokehold over the inputs that make modern electric vehicles work. The study also identifies vulnerabilities exposed in 2025 when China halted exports of seven key rare earths, forcing U.S. automakers—most notably Ford—to idle production lines
Study Methods: How the Analysis Was Built
Buckberg integrates three core evidence streams:
| Evidence Streams | Summary |
|---|---|
| Supply-Chain Mapping & International Metrics | Using International Energy Agency (IEA) data and critical mineral flow charts (see Chart 2, page 7), the paper shows China’s staggering share of global refining: 91% of rare earth magnet materials, 60% of magnet alloy production, and 55–90% of midstream processing across copper, lithium, cobalt, and graphite. |
| Policy Comparisons Across the U.S., EU, and China | The study juxtaposes Biden-era electrification incentives with Trump-era tariff-based protectionism, documenting how shifting rules reshape investment and expose U.S. firms to ongoing mineral, magnet, and semiconductor risks—including China’s control over Dutch chipmaker Nexperia’s supply chain (pages 6–7). |
| Case Studies of Real-World Disruptions | When China suspended exports of neodymium, praseodymium, dysprosium, terbium, and related REEs in mid-2025, U.S. EV and ICE vehicle manufacturing suffered immediate impacts. Buckberg uses these episodes as evidence that China’s rare earth dominance has matured into a strategic “dagger at the throat” of U.S. auto production (page 7). |
Key Findings: China’s Rare Earth Monopoly Is Now a Direct Auto-Sector Risk
China repeatedly weaponizes rare earths and magnets.
The paper cites China’s October 2025 expansion of export controls on 12 rare earth elements, including extra-territorial restrictions on goods containing even 0.1% rare earth material—threatening global trade flows (page 7).
The U.S. lacks diversified processing capacity.
Even as automakers build EV platforms, the essential inputs—NdFeB magnets, high-purity REEs, and precursor materials—remain almost entirely China-dependent.
National security risks are rising.
Buckberg notes that modern vehicles—with hundreds of semiconductors and onboard cameras—are potential surveillance vectors if supplied by adversarial states (page 8). Rare earth monopolies and chip chokeholds amplify these risks.
Industrial policy swings are destabilizing.
The rapid shift from Biden-era EV acceleration to Trump-era tariff fortification exposes the auto sector to investment whiplash (pages 9–12). Without stable rules, auto firms cannot build long-term domestic REE-free EV supply chains.
Implications: What This Means for Rare Earths and the Western Auto Sector
| Implications | Summary |
|---|---|
| Rare earth resilience is now a precondition for U.S. auto sovereignty | The paper makes clear that EV policy, defense manufacturing capacity, and economic security all hinge on securing non-Chinese REE supplies |
| Domestic U.S. EV success is impossible without REE diversification | Even with tariffs blocking Chinese EV imports, U.S. automakers remain exposed because their motors and components rely on Chinese‐sourced magnets |
| Allied partnerships become vital | Buckberg underscores that only collective U.S.–EU–Japan efforts can offset China’s mineral and magnet dominance (pages 6–8). |
| Innovation in battery & magnet chemistry is strategically essential. | The study alludes to research gaps—alternative motor designs, magnet recycling, and reduced-dysprosium technologies—that could ease China exposure in the long run. |
Limitations and Controversies
- The study analyzes policy impacts but does not model rare earth price or availability shocks quantitatively.
- It presumes continued Chinese dominance but does not deeply assess emerging REE projects in Australia, Europe, Canada, or the U.S.
- Its policy conclusions lean toward U.S. industrial activism, which some critics view as politically charged.
- The extraterritorial interpretation of China’s rare earth bans rests on publicly reported regulatory language; enforcement in practice remains uncertain.
Conclusion
Buckberg’s work is a clear warning: the United States cannot secure its auto future without securing rare earths. EV policy, tariffs, and domestic industrial incentives will continue to wobble unless the U.S. simultaneously invests in REE mining, separation, magnet production, and recycling—and coordinates globally to break China’s decades-long monopoly. This study’s central message is unambiguous: America’s automotive security starts with rare earth security.
Citation: Elaine Buckberg, Driving Security? U.S. Auto Industrial Policy in a Changing World, Harvard University M-RCBG Working Paper Series 2025.267, November 2025.
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Sounds like a descriptive study that is a decade behind its relevance date. Cutting edge research…?
GLTA – REI