How China could shut down auto factories around the world

China's dominance of the global supply chain is starting to hurt automakers

On April 4, the country cut off exports of a class of minerals called "heavy rare earth elements," and it sent the global auto industry into a panic

Rare earths are a class of 17 elements that have become indispensable in all kinds of applications — everything from fighter jets and submarines, to smartphones and appliances

You can even find them in sports equipment, tennis rackets and baseball bats

They are also, of course, essential to the modern automobile

Gas burning cars use them to pollution through the vehicle's catalytic converter

Electric vehicles use them in motors and batteries. "Rare earths are really critical, and not just for electric vehicles," said Gracelin Baskaran, director of the Critical Minerals Security gram at the Center for Strategic and International Studies. "They are in your seat belt, your steering wheels, various parts of your electrical components

You are not going to manufacture a car without rare earths. "Rare earths are split into further, based on their atomic weight

Light rare earths are easier to source

It's the medium and heavy ones that China has totally monopolized

But where it really dominates is in cessing

The name "rare earth elements" is a bit misleading — the elements themselves are not that rare in nature

What makes them "rare" is the complex and difficult cess of separating them from the rock they are embedded in, and from each other

Since at least 2023, China has been tightening its grip on several of the key critical minerals it vides for the world, Baskaran said

Still, the April 4 export restrictions shocked the automotive world. "It came out of nowhere," said Dan Hearsch, managing director at AlixPartners. "Nobody had any time to react to it

I mean, within a matter of weeks, all of the material in the pipeline was out. "European automakers shut down factories

Ford had to idle duction of its Explorer SUV

This month, China started permitting some access to companies that supply parts to some automakers

And this week the Trump administration said it had reached a deal to expedite rare earth and magnet shipments to the U

Still it is un how durable these deals will be. "We're not out of the woods yet," Baskaran said. "There is a lot of volatility in the U. -China relationship in between tariffs and mineral restrictions

We've seen China ramp up restrictions over two years

Rare earths are just the newest one. "There are longer-term solutions if China cuts off access again: recycling, other sources and innovation, for example

This crisis may even spur the industry to take action that reduces dependence on China

But this rare earths crisis is just the in a series of supply disruptions over the last several years

Hearsch said it will ly get worse. "Today it's rare earths," Hearsch said. "But tomorrow it can and will be something else that maybe we're not thinking, that maybe isn't even all that valuable and suddenly will be. "Watch the to learn more.