Highlights

• China's new energy vehicle (NEV) sales surged 36.9% in May 2025, capturing 48.7% of total vehicle sales.
• NEV exports more than doubled, with 212,000 units shipped in May and a 64.6% year-on-year increase.
• China's control over rare earth materials and EV supply chains represents a significant geopolitical and industrial strategic advantage.

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In a key development with direct implications for global rare earth markets, China’s Ministry of Industry and Information Technology (opens in a new tab) has released figures (opens in a new tab) showing explosive growth in new energy vehicle (NEV) production, sales, and exports—solidifying China’s dominance in the electric vehicle (EV) ecosystem and foreshadowing intensified global competition for critical materials like neodymium, dysprosium, and terbium.

According to the media release:

• In May 2025, China sold 2.69 million vehicles, a 11.2% year-over-year increase, with NEV sales surging 36.9% to 1.31 million units, accounting for a significant 48.7% of all new vehicle sales.
• From January through May, NEVs comprised 44% of total new vehicle sales, with cumulative NEV sales reaching 5.61 million units, up 44% year-over-year.
• NEV exports more than doubled, with 212,000 units shipped in May alone, and 855,000 exported year-to-date, marking a 64.6% year-on-year increase.

Implications for the West

This data confirms that China is not just outpacing the West in EV adoption—it is exporting the future of mobility at scale, while also commanding supply chains of critical inputs, especially rare-earth permanent magnets (NdFeB) used in EV motors.

With each EV motor requiring 1–2 kg of rare earth magnets, China’s pace suggests rare earth demand is entering a structurally higher plateau. As trade tensions and export controls escalate, Western automakers and defense sectors are facing growing vulnerability, particularly as China tightens its grip on dysprosium and terbium supplies, which are essential for high-temperature motor performance.

Rare Earth Exchanges (REEx), since its launch in October 2024, has reported that explosive growth in downstream verticals—especially electric vehicles (EVs)—is central to China’s multi-decade strategy for global ascendancy as a geopolitical leader. 

The latest sales data validates that forecast.

And assuming even conservative accuracy, this is a wake-up call for the supply chain. The data must be viewed with scrutiny, given a lack of transparency.  

However, it's becoming apparent China is no longer merely dominating the upstream rare earth mining sector; it is converting that advantage into global market share across magnets, motors, and final products. The sheer scale of China’s NEV ecosystem gives it a commanding presence over demand-side dynamics, reinforcing its pricing power and geopolitical leverage.

For the West, continued dependence on Chinese rare earth supply chains is a strategic liability. Critical magnet materials, such as neodymium, dysprosium, and terbium, are increasingly embedded in Chinese exports, not just components. As these materials underpin everything from EV motors to missile guidance systems, this isn’t just industrial risk—it’s national security exposure.

Final Thoughts

REEx urges Western policymakers, defense planners, and automakers to heed this as a final warning: diversify rare earth sourcing, build domestic processing capacity, and implement coherent industrial strategies—or risk watching China capitalize on its rare earth momentum to establish lasting geopolitical control.