A recent report has suggested that Suzuki Motor Company has ceased production of its swift-Compact car in Japan due to parts shortages caused by restrictions on rare Earth Exports by China. Auto manufacturers globally were reeling under the pressure of supply shortages and the production halt has been going on from May 26 and would continue till June 6. Suzuki would soon restart the Swift production at its plant on June 13, while the full production of the vehicle would resume on June 16th.
Suzuki would not be the only manufacturer that would be reeling under such pressure, beyond Suzuki BMW warned that its supplier network was also affected by rare earth shortages. And Mercedes has been considering to built a bufferstock to ensure that such situations can be tackled with ease.
Automakers such as General Motors and BMW and other major suppliers like ZF and BorgWarner are seeking substitute motors that can work with reduced rare earth content to cut the reliance on China.
China’s decision to suspend the exports of a wide range of rare earth minerals and related magnets has caused major hindrances for automakers and also affected the global supply chains of necessary components for EV battery production. EV production is not the only dynamic that has reported such issues aerospace manufacturers, Semiconductor companies and Military contractors around the world have been witnessing similar issues as well.
China’s dominance of the critical mineral industry, a key to green energy transition, has been serving as a out as a key leverage in its response towards the trade war initiated by US President Donald Trump. According to a Reuters Report, China has a key majority in supplying key earth minerals and China produces about 90% of the World’s Rare Earth Minerals. While the decision could be directed towards US and their Tariffs, automotive industries around the world have been witnessing the brunt of the issue. Manufacturers such as Mercedes Benz are actively working towards the creation of a buffer stock of such materials to protect themselves against such issues.
List of Critical Earth Minerals
The Critical materials whose supplies have been halted includes materials like, Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium, and Yttrium. An earlier report from Reuters had also indicated that Industry executives from India, Japan and Europe are urgently seeking to meet and hold a discourse with Chinese officials to expedite stalled export licenses around next week. A Japanese business delegation is expected in Bejing in June.
A resolute solution for such issues Ministry of heavy industries is preparing a stakeholder meeting to discuss the formation of a Domestic rare Earth Magnet Industry. Proposals under consideration as a per an economic times report have been Public-Private partnerships and Production Linked Incentives.
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