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Q&A with BMI's Santiago Arieu on the magnet crisis disrupting global auto production

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87% Informative

Rare earth magnets, invisible yet indispensable, are the backbone of modern automotive technology.

Europe , which sources 98% of its rare earth magnets from China , finds itself particularly exposed.

Efforts to bolster domestic supply through initiatives like the EU ’s Critical Raw Materials Act have failed to match China 's scale or competitiveness.

European operations struggle to compete with Chinese producers on efficiency efficiency.

These price increases could have a substantial impact on vehicle sales volumes, as higher costs would further strain affordability at a time when vehicle pricing is already elevated. We also see the potential for this situation to lead to tighter auto financing terms across Europe , as ongoing rare earth mineral supply constraints could create additional challenges for EV pricing..