MEMA, Alliance for Automotive Innovation Warn of Magnet Shortage in U.S. Automotive Supply Chain

Escalating trade disputes between the U.S. and China may soon lead to a shortage of magnets that will impact the automotive supply chain, according to Kelley Blue Book.

In addition to tariffs, China and the U.S. have engaged in non-tariff barriers, such as the U.S. restricting semiconductors imported from China, and China blocking magnets made from rare earth minerals from being imported to the U.S.

The Alliance for Automotive Innovation and MEMA sent a joint letter to U.S. president Donald Trump on May 9 warning what a shortage in such magnets could do to the supply chain.

These magnets are found not only in large motors powering EVs, but sensors and components throughout internal combustion engine vehicles as well. This includes automatic transmissions, throttle bodies, alternators, various motors, seat belts, speakers, lights, motors, power steering, and cameras, as highlighted by the letter.

“Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components,” the letter stated.