KATHMANDU: General Motors’ early investment in U.S.-made rare-earth magnets is paying off as China tightens export restrictions on the critical components, The Wall Street Journal reports.
In 2021, GM started investing in U.S.-based magnet production to depend less on China. It signed long-term supply agreements with Germany’s VAC, a leading producer of rare-earth magnets and MP Materials, the largest rare-earth miner in the U.S.
Both are building new plants in the country to supply GM. More recently, GM also added Texas-based Noveon to its supplier network.
VAC’s plant in South Carolina and MP’s facility in California will start production this year, mainly supplying GM. The Pentagon has invested $400 million in MP to boost U.S. production, while VAC’s project has also received support from the U.S. defense department.
China’s new export rules now need special approval even for magnets made outside the country using Chinese materials, creating risks for other automakers.
Ford, for example, was forced to halt production earlier this year due to magnet shortages.
Analysts say GM’s early investment gives it a strong supply advantage while other automakers struggle to find non-Chinese sources. However, experts warn it could face higher costs if trade tensions reduce later.
GM supply chief Shilpan Amin said the decision was about resilience, not short-term cost. “That first mover’s advantage should last a while,” he said.
