The largest US automakers and their suppliers are considering the possibility of moving the production of some spare parts to China due to the suspension of Chinese exports of rare earth metals (REM), The Wall Street Journal (WSJ) reported, citing its sources.
According to their information, US automakers fear that in a few weeks they will have to stop production of a number of cars due to a shortage of REM. To circumvent export controls, they may start producing electric motors in Chinese factories or supply American-made motors to China for mounting magnets made of rare earth alloys. It is noted that the restrictions apply only to magnets, not finished parts.
As the WSJ recalls, 90% of the world's rare earth metals are supplied from China. Rare earth magnets remain functional at high temperatures, so they are widely used in the production of smartphones and F-35 fighters. Thanks to rare earth magnets, electric cars can reach high speeds.
On April 14, the Chinese authorities, in the context of the trade war with the United States, decided to stop the export of a number of rare earth metals and magnets, which could negatively affect the global automotive, semiconductor and aerospace industries. The Chinese government is developing a new system for regulating exports, suspending the supply of magnets and heavy rare earth metals from many of its ports.