The scale of the operation is immediately apparent when you drive past the Mountain Pass mine in the Mojave Desert on a clear morning. Conveyors are operating, trucks are moving through ochre-colored terrain, and the entire facility is humming with a purpose that seems almost urgent given the times we live in. In the Western Hemisphere, this is the biggest rare earth mining operation. Despite all of its efforts, it is still only a small response to a very big question: what will happen to the world’s electric vehicle market if the nation that controls almost all essential materials decides to tighten its hold?
When Beijing announced new limitations on exports of rare earth magnets used in the production of automobiles in June 2025, that question ceased to be theoretical. Auto executives responded with obvious alarm, even though many had been secretly hoping that this specific risk would be resolved through diplomacy. In ways that weren’t always publicly acknowledged, the majority of the global automotive industry’s efforts to build the EV future—factory expansions, platform redesigns, and battery commitments spanning ten years—rest on a mineral supply chain that passes almost entirely through China.
| Category | Details |
|---|---|
| Subject | Rare Earth Elements (REEs) & EV Supply Chain |
| Key Company | MP Materials Corp (NYSE: MP) — largest rare earth producer in the Western Hemisphere |
| Mine Location | Mountain Pass, California, USA |
| China’s Share of REE Mining (2023) | ~69% of global production |
| China’s Share of REE Processing | ~85–92% globally |
| China’s Share of Rare Earth Magnets | ~92–98% of global permanent magnet production |
| EV Motor Rare Earth Demand (2024) | Over 830,000 tons |
| Current REE Recycling Rate | Only ~1% globally |
| Key REEs for EV Motors | Neodymium, Dysprosium, Terbium, Praseodymium |
| Global Demand Forecast | Expected to increase 7x by 2040 |
| US Policy Response | DoD funding for Mountain Pass mine and domestic separation plant |
| Reference Website | Visual Capitalist — Why Rare Earths Are Critical to EV Motors |
It is worthwhile to consider the figures underlying that reliance. Approximately 69% of the world’s rare earth ores are mined in China. However, mining is just the start of the tale. China also controls between 85 and 92 percent of the infrastructure and specialized chemistry needed to process, refine, and transform those ores into useful materials.
These processes took decades to complete. China accounts for between 92 and 98 percent of the world’s production of the permanent magnets found inside EV motors, which are neodymium-iron-boron magnets that enable the construction of a potent electric motor small enough to fit inside a car wheel. In the conventional sense, that is not a supply chain vulnerability. It’s more akin to a dependency with no clear way out in the near future.
It’s difficult to ignore how long this predicament persisted without inciting the appropriate level of political urgency. The story of rare earths is not new; China’s hegemony was well-established by the early 2000s, and the export quotas imposed in 2010 should have served as a stark warning to Western governments about the need to develop recycling alternatives. However, the issue remained in think-tank reports rather than cabinet meetings for years due to the supply chain’s complexity and comparatively low rare earth prices. It’s in both now.
Most people outside of materials science are unfamiliar with the names of the materials at the heart of the EV magnet story: neodymium, dysprosium, terbium, and praseodymium. Compared to lithium and cobalt, which have both received widespread coverage of their own supply chain issues, they lack the cultural visibility. However, they play a more personal and difficult-to-replace role in the EV motor.
The torque characteristics of the best EV motors rely on neodymium-iron-boron magnets, which are the strongest permanent magnets produced today. Weight, heat, and efficiency are physical constraints that engineers at companies like Tesla, Volkswagen, and Hyundai deal with on a daily basis. These constraints are ingrained in the engineering assumptions at a level that is genuinely challenging to quickly redesign.
How did China get to this point? The truth is that it required decades of thoughtful policy, production subsidies, and a readiness to bear environmental costs that Western regulators would not have allowed. Rare earth mining and processing produce enormous amounts of mine tailings, radioactive waste, and acidic wastewater, all of which are truly harmful jobs.
Accepting those expenses, China constructed the infrastructure, trained the labor force, and gradually advanced down the value chain from raw ore to refined material, finished magnets, electric motors, and, at last, the electric cars that are currently competing in European showrooms. The entire chain was established and functioning at scale by the time Western governments began to pay close attention.
There are genuine, if unfinished, attempts to break that chain. With assistance from the US Department of Defense, MP Materials, the company running Mountain Pass, has been increasing its processing capacity. Given that an F-35 fighter contains more than 400 kilograms of materials containing at least one rare earth element, the Pentagon has a direct stake in rare earth independence. Adopted in 2024, the EU’s Critical Raw Material Act aims to develop competitive European separation and refining capabilities.
Instead of just shipping ore back to China for finishing, which was the awkward reality of the so-called Western supply chain for a long time, Australia has been strengthening domestic processing. These are significant actions. However, it takes ten years for REE projects to produce significant results after the initial investment. Years, not quarters, are used to quantify the difference between the West’s current state and its ideal state.
Recycling is often cited as a substitute, and it has genuine potential. Wind turbines, electric vehicle motors, and disk drives—exactly the products being produced in increasing quantities—have the highest theoretical yields of recycled rare earths. However, only around 1% of rare earths are currently recycled worldwide, in part because the economics haven’t supported it and in part because the energy-intensive chemistry needed to separate rare earths from intricate electronic assemblies hasn’t yet achieved commercially appealing efficiency.
After the 2010 export quota shock, Japan made more progress than most, and researchers at universities like Ecole Polytechnique are developing methods that could use recycled materials without needing the extremely high purity levels required by current magnet manufacturing. Within ten years, this work may become commercially viable. It might also take longer than anyone is currently projecting.
As the EV industry navigates this, it seems like a sector that built its future on assumptions that were always brittle and is now suddenly realizing how fragile it is. Reducing reliance on politically unstable fossil fuel supply chains was the goal of the green transition. To a certain extent, it has.
However, it has created a new type of supply chain exposure that is technically intricate, geographically concentrated, and under the control of a government that has demonstrated its willingness to use that control as economic leverage. That is not a criticism of electric cars. It’s an argument for the industry to finally, if belatedly, begin to treat the materials question with the same seriousness as the engineering question.
