Automakers around the world are raising urgent concerns about a looming shortage of rare-earth magnets from China that threatens to disrupt vehicle production within weeks. These magnets are essential to a wide range of automotive components, from windshield wiper motors and anti-lock braking sensors to power steering, automatic transmissions, and electric motors.

A letter dated May 9 from the Alliance for Automotive Innovation — representing companies such as GM, Toyota, Volkswagen, and Hyundai — warned the Trump administration that without reliable access to these materials, vehicle assembly lines in the U.S. could soon face slowdowns or shutdowns.

The shortage stems from China’s recent export restrictions on rare-earth magnets, which require new licenses for outbound shipments. As China controls more than 90% of the global processing capacity for these materials, the restrictions have dramatically reduced export volumes and created uncertainty for global supply chains.

In April alone, rare-earth magnet exports from China were cut in half, largely due to a complex and opaque licensing process that requires extensive documentation from exporters. Industry groups, including MEMA, The Vehicle Suppliers Association, co-signed the letter and stressed the severity of the threat to U.S. manufacturing.

They warned that without immediate intervention or access to alternative supply sources, domestic auto production could face significant setbacks. This could include reductions in output or full stoppages at major vehicle factories, threatening jobs and supply chains across the automotive industry.