Data released by China’s Ministry of Commerce yesterday suggested exports of rare earth minerals could cease for the rest of the year.
Currently 97 percent of the world’s rare earth metals are produced in China, including substances like neodymium, which is used in electric motor magnets, as well as other materials used in the development of rechargeable batteries.
Senior consultant for Frost & Sullivan, Nicholas Meilhan, recently told the Reuters Global Autos Summit that he believed the strain of rare earth metal shortage would increase with time as EVs grow in popularity.
“I think it's a huge problem because those metals are used for electric motors. Any car with an electric motor will use these rare earth metals,” Mr Meilhan said.
He agreed with experts at the summit that mines in other countries would be encouraged to reopen if the materials could no longer be sourced from China at a feasible price.
Valeo CEO Jacques Aschenbroich said he did not believe a rare earth minerals shortage would be a long-term problem however, and suggested a lack of certain electronic components could create “much more of a headache” in the short-term.
Mr Aschenbroich was confident China’s supply of rare earth minerals would not completely dry up.
“I don't expect China will cut off the supply and make the products absolutely unavailable in the market. It might happen but I don't think it is the most credible scenario,” he said.