Europe’s Auto Sector Threatened by China Rare-Earth Curbs

European automakers face supply risks from anticipated Chinese curbs on rare-earth metal exports, Italian industry lobby ANFIA warned. Stocks of critical rare-earth elements are low across European suppliers, leaving production of permanent magnets and other components vulnerable.

Neodymium and related elements are central to high-strength permanent magnets used in electric vehicle traction motors, as well as in sensors and certain catalytic applications. Tighter export controls would raise costs, disrupt EV powertrain production schedules and amplify global price volatility.

Industry representatives say urgent measures are needed: diversify upstream supply chains, accelerate recycling and urban mining, build European processing and separation capacity, and explore motor designs that reduce dependency on neodymium-iron-boron magnets. Policymakers and manufacturers are being urged to coordinate strategic stockpiling, targeted investment and regulatory support to prevent production bottlenecks and sustain the EV transition.