Automakers around the world are hitting the brakes on their electric vehicle plans as China tightens its grip on rare earth elements. In April 2025, China imposed export controls on seven critical rare earth metals that are essential for building electric cars and defense equipment. This move has sent shockwaves through the automotive industry, forcing companies to scramble for alternatives.
Think of rare earth elements as the secret ingredients in your favorite recipe. Without neodymium, praseodymium, terbium, and dysprosium, electric vehicle motors simply cannot deliver the power and efficiency that drivers expect. These metals create the super-strong permanent magnets that make EV motors spin smoothly and efficiently. When China controls the flow of these materials, it’s like having one chef control all the best ingredients in town.
China’s control over rare earth elements is like one chef hoarding all the essential ingredients needed for the perfect recipe.
China’s dominance in this field runs deeper than just mining. The country has spent decades perfecting every step of the process, from digging ore out of the ground to creating finished magnets. While other countries have tried to catch up since China’s 2010 rare earth embargo, they still lag far behind in technology and cost-effectiveness. It’s like trying to compete with a master baker when you’re still learning to crack eggs properly.
Automakers are now frantically searching for solutions. Some are investing heavily in recycling programs to extract rare earths from old batteries and electronics. Others are forming partnerships with mining companies outside China, hoping to build new supply chains from scratch. A few brave companies are even researching motor designs that use fewer rare earths or none at all. These restrictions mirror China’s strategic approach, as current export controls reflect a repeated game strategy similar to the 2010 export cut that prompted global diversification investments.
The challenge extends beyond simply finding new mines. Building the specialized factories needed to process rare earth ores and manufacture magnets requires enormous investments and years of development. The rest of the world currently lacks the infrastructure to produce EV motors independently.
This supply chain squeeze threatens the global shift to electric vehicles just when momentum was building. Automakers must now balance their ambitious electrification goals with the harsh reality of mineral scarcity, potentially slowing the green revolution that many had hoped would accelerate.
