Europe's carmakers are running out of rare earths, and China knows it

Only around a quarter of Chinese export license applications for rare earth magnets have been approved since Beijing tightened controls, according to CLEPA, and European auto suppliers have already reported production line shutdowns as a result. This is squeezing a sector that's simultaneously losing ground to Chinese-built cars: Chinese brands took roughly 6% of EU vehicle registrations in the first four months of the year, double their share twelve months prior, while China exported more than a million vehicles in a single month for the first time in June, up 71% year on year. Brussels' response so far is tariffs of up to 35% on some Chinese EVs. Tariffs don't fix a magnet shortage. China controls roughly 60% of global rare earth mining and over 85% of processing capacity, which means Europe's leverage over its own supply chain is close to zero, and Chinese firms are responding to the tariff wall by buying into European parts makers instead of just shipping around it.