Exclusive: China grants rare earth licenses to suppliers of top three US automakers, sources say

Exclusive: China grants rare earth licenses to suppliers of top three US automakers, sources say

In a significant development that could ease supply chain disruptions, China has reportedly granted rare earth export licenses to suppliers of the top three US automakers. The move comes amid ongoing tensions between China and the United States, particularly regarding trade policies and critical mineral exports.

The news was first reported by CNBC, citing sources close to the matter [1]. The top three US automakers affected by this development include General Motors, Ford, and Tesla. These companies have been grappling with supply chain disruptions due to China's export restrictions on rare earth elements, which are crucial components in the production of electric vehicles and other automotive technologies.

The export restrictions, imposed by China's Ministry of Commerce in early April, have had a profound impact on the global automotive industry. Many European auto supplier plants and production lines have been shut down due to the curbs, according to Europe's auto supplier association CLEPA [1]. The German Association of the Automotive Industry (VDA) has also expressed concerns about the potential halt in production due to the export restrictions [1].

China's dominance in the rare earth market, accounting for approximately 60% of global production, has made it a strategic point of leverage in the trade war with the United States. The US government has previously warned about the strategic challenge posed by China's control over rare earths, which are essential for the clean energy transition [1].

The granting of these licenses by China is seen as a potential solution to the immediate supply chain issues faced by the US automakers. However, the long-term implications of this development remain to be seen. It is crucial for these companies to continue exploring alternative sources and reducing their reliance on China for critical minerals.

References:
[1] https://www.cnbc.com/2025/06/05/auto-groups-sound-the-alarm-as-chinas-rare-earth-curbs-start-to-bite.html