Rare earths are key materials for many electric vehicle (EV) parts. China has a dominant position in the global rare earth supply chain with its abundant deposits and high vertical integration. In June 2025, China implemented export controls on some medium and heavy rare earths, triggering a crisis for the global automotive supply chain.
To counter China’s dominance, the US, the EU, and Japan are keenly working to cut their reliance on Chinese rare earth supply. Automakers and parts suppliers also continue to develop alternative solutions such as rare earth-free and rare earth-reduced electric motors.
However, it is difficult to achieve self-sufficiency in rare earths in the short term, and alternative technologies have yet to mature. China's rare earth supply is still indispensable.
Rare earths are key materials for EVs, especially for electric motors
Chart 1: Main rare earths-applied components in EVs and HEVs
Top-4 countries together own 86% of global total rare earth reserves
China dominates rare earth supply chain, monopolizing 90% of global refining capacity
China tightens related export controls, solidifying dominant position
Chart 4: China rare earth-related export control policies and details
Heavy rare earth export control causes supply crisis to automakers
Chart 5: Influences of China rare earth export control on major auto supply chains
Chart 7: EU's plan to build complete domestic rare earth supply chain
Japan strengthens its overseas heavy rare earth supply deployment
Chart 8: Japan's plans to develop non-China mineral resource and recycling facilities
Chart 9: Automaker development of rare-earth-free and -reduced electric motors
Parts makers strive for alternatives, but related techs are immature
Chart 10: Parts makers development of rare-earth-free and -reduced electric motors
Chart 11: Summary of Chinese rare earths' influence on global auto supply chains
