Auto industry sounds the alarm as

China’s Ministry of Commerce in early April imposed export

Automotive industry groups

are increasingly worried about a rare earth shortage.Several European auto supplier plants and production lines have already been shut down due to China’s recent export controls, according to Europe’s auto supplier association CLEPA, with the group warning of more outages as inventories deplete.

Germany’s car industry and auto executives have also sounded the alarm, saying the highly globalized sector is acutely vulnerable to further supply chain disruption.

China’s Ministry of Commerce in early April imposed export restrictions on several rare earth elements and magnets widely used in the automotive, defense and energy sectors. The curbs came as part of a response to U.S. President Donald Trump’s tariff increase on Beijing’s products.

Some of the affected rare earth elements are vital components to the production of both combustion engines and electric vehicles.

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CLEPA said Wednesday that while hundreds of export license applications have been submitted to the Chinese authorities since early April, only around 25% appear to have been approved.

“With a deeply intertwined global supply chain, China’s export restrictions are already shutting down production in Europe’s supplier sector,” CLEPA Secretary General Benjamin Krieger said in a statement.

For its part, the German

Association of the Automotive Industry (VDA), the country’s main car industry lobby, warned that Beijing’s export restrictions could soon cause output to grind to a halt.

“The Chinese export restrictions on rare earths are a serious challenge for the security of supply, and not just in the automotive supply chains. Although some licences have now been granted, this is currently not enough to ensure smooth production,” VDA President Hildegard Müller told CNBC via email.


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