While Rivals Falter, Hyundai Has a Hidden Advantage
Hyundai has reportedly stockpiled a significant supply of rare earths used for an array of car parts as other automakers grapple with China's export restrictions on the elements. China mines 70% of the world's rare earth materials but processes and refines 90% of them. Vehicle parts such as automatic transmissions, throttle bodies, cameras, power steering, speakers, seat belts, lights, and more use magnets primarily made from rare earth materials.
According to an unnamed source who attended a private Hyundai investor call and told Reuters about it, Hyundai's rare earth stockpile can last about a year, eliminating concerns of a near-term supply shortage. China's decision to restrict rare earth and related magnet exports dates back to April, when the country curbed its exports of dysprosium, gadolinium, scandium, terbium, samarium, yttrium, and lutetium rare earth elements by introducing a new licensing requirement. Hyundai reportedly increased its rare earth stockpile recently when the country relaxed its export restrictions, but declined to comment on whether it and its sister company, Kia, personally formed the reserve or if they sourced it from suppliers.
Ford and BMW have already been impacted by the rare earth shortage. In May, Ford halted production on its Explorer SUV at its Chicago plant for a week. BMW said parts of its supplier network were disrupted, but its plants ran normally. Last week, China issued rare earth licenses to suppliers of the top 3 U.S. automakers, including General Motors (GM), Ford, and Stellantis. Some of the licenses are valid for six months. BMW and GM are working on motors with low-to-zero rare-earth content to avoid situations like this, but scaling production while managing costs remains challenging.
"We must reduce our dependencies on all countries, particularly on a number of countries like China, on which we are more than 100% dependent," European Union Commissioner for Industrial Strategy Stephane Sejourne said, according to Reuters. Mathias Miedreich, board member for electrified propulsion at German automotive supplier ZF Friedrichshafen, expressed worries earlier this month that the rare earths bottleneck could resemble the auto industry's computer chip shortage during the COVID-19 pandemic, which subtracted millions of units from manufacturers' production.
On Wednesday, President Trump said: "Our deal with China is done, subject to final approval with President Xi and me," adding that China will supply full magnets and any necessary rare earths upfront. The deal has been described as a framework agreement, but auto industry players in India have urged the country's government to accelerate Chinese approval of a rare earths deal. According to ET Times, Indian auto executives are awaiting confirmation for a meeting with China.
The U.S. auto industry could encounter future troubles with China's rare earth exports, even with the recently announced framework, since China dominates the elements' global supply chain. GM appears to be in one of the best positions to avoid future rare earth export disruptions beyond the immediate term since it formed strategic alliances with two rare earth mineral processing companies four years ago for domestic rare earth sourcing and processing. The alliance's processed rare earth minerals were initially planned for GM's electric cars, and while they're not yet active, they could provide much-needed diversification in the supply chain.
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Boston Globe
2 hours ago
- Boston Globe
This is ground zero in Trump's trade war
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USA Today
2 hours ago
- USA Today
Best budget luxury cars for 2025: Affordable elegance under $45K
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Car and Driver
2 hours ago
- Car and Driver
1982 BMW 528i on Bring a Trailer Is the Nicest We've Seen
Here's a fine-looking early BMW 5-series that checks a lot of boxes. It's not an M5, but it does feature an inline-six, a five-speed manual, and rear-wheel drive. It also boasts exceptionally low mileage and condition to match. The E28 BMW 5-series is mostly known as the debut of the BMW M5. That car is by now a legend, noted for its mighty 3.5-liter inline-six. If it's a racehorse, here's a car from the same bloodline that's a bit more domesticated, but still loves to trot. Bring a Trailer This 528i is the underlying sports sedan that made the first M5 so good, and this 1982 model up for sale on Bring a Trailer (which, like Car and Driver, is part of Hearst Autos) looks to be an exceptional example of the breed. Sold new in France, it's got an M30 2.8-liter inline-six with higher compression than what we received in the U.S.—mated to a five-speed manual gearbox. It also sports the crisply elegant European bumpers rather than the overlarge U.S. units. And its 15K kilometers on the odometer translates to a freakishly low U.S. equivalent of less than 10,000 miles. Ooh, and those French selective yellow headlights, that's a nice touch. Courtesy: Bring a Trailer This car was bought last year on Bring a Trailer by the sort of owner who seems particularly fastidious. They've gone through the engine bay and cabin and removed any aftermarket parts, for instance replacing the Kenwood door speakers with factory BMW units. There is no A/C, but the seller is throwing in a factory A/C system from another car, which the new owner could have installed. Courtesy: Bring a Trailer The 5-series of this generation is such a overlooked machine, one that puts the spirit of the original 2002tii into a discreet business suit. The 2.8-liter inline-six produces a plentiful 170 horsepower, and it loves to rev. An E28 is tiny next to a modern 5-series, and the experience of hurrying it down a two-lane road while looking out through that expansive greenhouse is a wonderful one. Courtesy: Bring a Trailer The very low mileage does mean that this car is something to be reserved for special occasions, but it should be faithful even if it sits around a bit. These are far simpler and more durable cars than electronics-heavy later Bimmers, and that inline-six doesn't have the valve adjustment schedule of the M5's motor. This is the best of Bavaria, and with no reserve, it's going home with a new owner. The auction ends on June 25. Brendan McAleer Contributing Editor Brendan McAleer is a freelance writer and photographer based in North Vancouver, B.C., Canada. He grew up splitting his knuckles on British automobiles, came of age in the golden era of Japanese sport-compact performance, and began writing about cars and people in 2008. His particular interest is the intersection between humanity and machinery, whether it is the racing career of Walter Cronkite or Japanese animator Hayao Miyazaki's half-century obsession with the Citroën 2CV. He has taught both of his young daughters how to shift a manual transmission and is grateful for the excuse they provide to be perpetually buying Hot Wheels. Read full bio
