Highlights
- China controls approximately 90% of rare earth processing, impacting automotive and electric vehicle (EV) supply chains through a strict 2025 licensing regime.
- European Original Equipment Manufacturers (OEMs) are shifting to alternative motor technologies to reduce dependency on rare earth elements.
- Geopolitical tensions and clean energy demands are driving urgent reconfiguration of global rare earth element sourcing strategies.
Georgia Collins’ Manufacturing Digital article (opens in a new tab) rightly underscores China's near-monopoly in rare earth processing—controlling ~90% of global refining capacity and 60% of raw production. It accurately notes that China's 2025 licensing regime has impacted exports, creating ripple effects through automotive and EV supply chains. The focus on dysprosium and terbium—critical for high-temperature permanent magnets used in electric motors—is on point. Likewise, the mention of European OEMs shifting to externally excited synchronous motors (EESMs) to eliminate dependency on rare earths reflects real trends at BMW, Renault, and others.
Also correct is the reference to a temporary U.S.-China détente: Chinese customs authorities did approve a round of licenses in July 2025 after bilateral talks, temporarily easing bottlenecks.
Where the Facts Fray
The piece claims “three major U.S. OEMs” voiced concern over REE export rules, but fails to cite any names, quotes, or official statements—undermining the assertion. However, it's understandable considering non-disclosure and the tendency for companies not to want to disclose such problems.
Ford’s alleged June shutdown tied to rare earth supply issues is presented as fact, but publicly available sources link it to semiconductor shortages and logistics issues, not terbium bottlenecks. That detail may be speculative or conflated. We cannot be certain.
Furthermore, the article implies the licensing regime was solely a response to President Trump’s 2025 tariff hikes. In truth, China’s Ministry of Commerce began drafting export controls back in 2023 under “dual-use” technology frameworks. Tariffs may have accelerated enforcement, but they weren’t the root cause.
This tension has been mounting for nearly a decade on and off.
A Dash of Bias, Lightly Sprinkled
The narrative leans toward a Western OEM victimhood frame, emphasizing “forced” diversification and “upheaval,” while portraying China’s export controls as political retribution. There's little attention to China's stated rationale: environmental compliance and industry consolidation. While yes, we understand that’s not the whole story, the more bias-free the better for investors.
Additionally, references to “clean energy demands” driving urgency are accurate—but ignore how OEMs themselves helped engineer the magnet addiction through design inertia.
Final Take: Clear Signals with Some Echo Chamber Noise
While the article raises valid alarms about REE dependency and policy fragility, its evidence base is inconsistent in places, and it leans a bit too heavily on geopolitical causality without full context. The result? A partially sound but subtly slanted summary.
RARE EARTH EXCHANGES™ VERDICT:
Mostly Accurate, with a Whiff of Hype.
Watch for omitted context and unsourced claims in otherwise credible coverage.
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