Japanese car manufacturing giant Nissan Motor is revising down production plans for its new Leaf series electric vehicle as the Chinese controls on exports of rare earth elements have created a shortage of car parts, Kyodo News reported on Tuesday.
The setback for Nissan’s new EV is the latest in a series of hurdles that carmakers globally have faced since China announced export controls of rare earths in early April.
Suzuki Motor, another Japanese giant, has reportedly halted production of its flagship Swift subcompact because of supply chain shortages, sources with knowledge of the matter told Reuters last month.
At the beginning of April, China announced it would curb its exports of dysprosium, gadolinium, scandium, terbium, samarium, yttrium, and lutetium. These so-called “heavy” and “medium” rare earth elements are mostly used in automotive applications, including rotors and motors and transmission in electric vehicles and hybrids, as well as in the defense industry in parts of jets, missiles, and drones.
The Chinese export restrictions reverberated through global supply chains and were initially felt in the automotive industry, where major car manufacturing associations warned that production and assembly lines are being idled due to a bottleneck in magnet and rare earth supply.
Germany’s automotive industry group VDA joined other carmakers to sound the alarm that the curbs and controls on China’s exports of rare earth elements and magnets could disrupt and even idle manufacturing lines.
In May, the Alliance for Automotive Innovation – which represents GM, Toyota, Volkswagen, and other major car manufacturers – warned of production reductions and even shutdowns of assembly lines without access to magnets and to rare earths.
China has eased some of its restrictions on exports of rare earth elements by approving “a certain number” of export licenses. However, global supply chains continue to feel the shortage of magnets and other rare earth-derived parts.
Charles Kennedy for Oilprice.com
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