China's control of rare earth magnets threatens EU auto industry

The European automotive industry faces increasing vulnerability due to its heavy reliance on China for critical raw materials. According to data from the International Energy Agency, China accounted for 91% of the world's production of refined rare earth elements used for magnets in 2024. For sintered permanent magnets, China's market share reaches 94%.

These magnets are essential not only for electric vehicle motors but also for internal combustion engine vehicles, powering components such as electric power steering and window regulators. The Association of Distributors and Manufacturers of Automotive Parts (SDCM) warns that this dependency is no longer a theoretical threat, noting that European factories already experienced disruptions last year.

In June 2025, the European Association of Automotive Suppliers (CLEPA) reported production line stoppages linked to Chinese export restrictions. This follows April 2025 measures where China limited the export of seven rare earth elements and their derived magnets as part of an escalating trade dispute. While some supplies were later partially restored, continued exports remain subject to administrative licensing from Beijing, granting Chinese authorities significant influence over European manufacturing stability.