The Gloomy Forecast for Global Electromobility: A Crisis Looming Over Our Country Too
Proposals from the Commission have already been put forward regarding this matter.
Get ready for a rollercoaster ride in the world of geopolitics. A looming raw material shortage is stirring up an international crisis, and it's not sparing our homeland's E-car production either.
In production halls across Germany, things might seem rosy on the surface, but there's a palpable sense of unease. China's strategic clampdown on the export of rare earths, crucial components for electric vehicle motors, is a potential bottleneck threatening Europe's mobility transition. The consequences? Stalled production, and possibly even a shutdown of future projects. With limited stockpiles, some suppliers barely have enough to last a month.
Major players like Volkswagen are playing a waiting game, with cautious optimism amid a cloud of uncertainty. Even approved suppliers experience occasional supply bottlenecks at the border. Behind closed doors, emergency plans are hatched, priorities set, and improvisations made—even for components once deemed secure. The impending crisis has largely remained under wraps, a hidden concern that the industry is desperately trying to brush off.
Behind the Scenes: Dependency Uncovered
When we delve into the global picture, the extent of dependency becomes alarmingly clear. Almost 90% of global rare earth magnet processing lies in Chinese hands. The intertwined history of environmental damage and outsourcing by Western countries in the '80s paved the way for China to seize control. Now, they hold the reins tightly.
The situation is more precarious than many imagine. Experts are already warning about an acute disruption of supply chains—with disastrous consequences for production lines. By 2030, the global demand for rare earth magnets could more than double, yet Europe has barely started building its own processing capacities. Projects in Sweden and France are still in their infancy, leaving the German automotive industry extremely exposed until a reliable alternative to Chinese raw materials is found.
Wait no more! Prepare to dive into the complex world of electromobility and the global raw material shortage. Stay tuned for more insights on Europe's hunt for alternative suppliers, China's grip on the market, and the global push for supply chain resilience.
[1] Supply Chain Dive. (2021). How China's rare earths industry controls global supply. [online] Available at: https://www.supplychaindive.com/news/china-rare-earths-global-supply/612632/
[2] Brookings.edu. (2020). Rare earths: What they are and why they matter to the United States. [online] Available at: https://www.brookings.edu/articles/rare-earths-what-they-are-and-why-they-matter-to-the-united-states/
[3] The Verge. (2021). Why Europe might never catch up with Tesla and China in EV sales. [online] Available at: https://www.theverge.com/2021/3/8/22323941/ev-electric-vehicle-sales-china-eu-tesla-lack-infrastructure
- Other countries, including Europe, are grappling with the implications of China's stronghold on the global rare earths industry, a crucial component in environmental-science-related industries like climate-change mitigation and electromobility.
- Despite Germany's significant investment in the production of electric vehicles, the industry's dependence on rare earth magnets, a majority of which are processed in China, could pose a significant threat to the country's electromobility transition, potentially leading to stalled production and a shutdown of future projects.
- As Europe's demand for rare earth magnets continues to grow, with projections suggesting a doubling by 2030, the lack of domestic processing capacities poses a serious risk, leaving the European automotive industry, particularly Germany, vulnerable until a reliable alternative to Chinese raw materials is found.
- The financial and energy sectors must acknowledge the necessity of investing in technology and innovative solutions to reduce dependence on China and ensure the resilience of supply chains in critical industries like environmental-science, technology, and the industry, thereby contributing to a sustainable and climate-friendly future.
