Experts warn that the ongoing microchip shortage, which severely cut dealer inventories, could worsen and intersect with a disruption in rare earth metal supplies needed for the growing electric vehicle market.
As geopolitical tensions grow in the wake of House Speaker Nancy Pelosi’s visit this week to Taiwan following stern warnings from China, auto industry insiders point to potential strains on vital tech supplies like microchips and rare earth metals. China’s history of disrupting supply lines bolsters these concerns.
Rare earth metals used in building permanent magnet motors for the majority of EVs around the globe are mostly sourced in China. Neighboring Taiwan, which continues to assert its independence from China despite that country’s repeated objections, is home to vital chip manufacturer Taiwan Semiconductor Manufacturing Co. which “the world relies on,” according to The Wall Street Journal, “leaving everyone vulnerable.”
Auto industry analysts warn that such a heavy concentration of chip and rare earth metal production could lead to devastating effects beyond vehicle manufacturing.
“China’s dominant role in both rare earth materials and chip production gives them a level of influence that could decimate production across many industries, including automotive,” iSeeCars Executive Director Karl Brauer told CCJ.
Of the six OEMs contacted by CCJ concerning rare earth metal sourcing, only GM responded. The automaker announced plans recently to obtain rare earth metals through a U.S. company based in Nevada. The 2024 Silverado EV is shown at the 2022 Work Truck Show earlier this year in Indianapolis.Commercial Carrier Journal
