Highlights
- Hyundai claims no production impact from potential rare earth magnet shortages, maintaining adequate inventory.
- China controls over 90% of rare earth magnet processing and implemented export licensing requirements starting April 2025.
- Global demand for rare earth magnets is projected to double by 2030, highlighting critical supply chain vulnerabilities.
Despite mounting global concern over rare earth magnet shortages, Hyundai Motor India (opens in a new tab) assured investors this week that its production lines remain unaffected. Speaking during an earnings call, Head of Investor Relations K.S. Hariharan said the company has maintained “adequate inventory” and is working closely with vendors to manage risk.
“We are not facing any issue,” Hariharan stated, noting that Hyundai is actively collaborating with suppliers to avoid disruption in electric motor components, which heavily depend on neodymium-iron-boron (NdFeB) permanent magnets.
This statement comes just months after China implemented export licensing requirements for seven rare earth elements and associated magnets starting April 2025—a move widely seen as tightening its grip on the global supply chain. China controls over 90% of rare earth magnet processing, a chokepoint for automakers, electronics firms, and renewable energy OEMs alike.
Why It Matters
Hyundai’s confidence may signal robust inventory hedging or diversified sourcing, but investors should remain vigilant. Rare earth magnets are essential for EV drivetrains, infotainment systems, and advanced driver-assistance technologies. Even a modest supply chain hiccup could ripple through production in the coming quarters—especially if demand accelerates.
Retail investors should also note Hyundai’s 7% share price jump, suggesting market optimism despite the supply risk backdrop. But with no disclosure on inventory duration, sourcing geography, or offtake agreements, deeper visibility is lacking.
REEx Critical Questions:
- How long can Hyundai sustain production without replenishment if China’s export squeeze intensifies?
- What percentage of Hyundai’s magnet supply chain is still China-dependent?
- Has Hyundai explored magnet recycling or alternate suppliers like Japan, India, or the EU-backed MSP network?
Hyundai may be managing the storm today—but with global demand for rare earth magnets projected to double by 2030, resilience strategies and long-term sourcing transparency will matter more than momentary reassurance.
Source: The Economic Times (opens in a new tab), PTI reporting, July 30, 2025
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