In a chaotic year for America’s car industry, a new threat is emerging that could shut down factories nationwide: a shortage of magnets.
Reuters reports that industry executives recently warned the White House that its trade disputes with China could “force the closure of car factories within weeks.”
Two Countries Playing Chicken With Trade
The U.S. and China have been locked in an escalating trade dispute since President Donald Trump enacted aggressive tariffs against many countries in early April.
The two countries are in talks and have lowered some tariffs. However, both also use so-called non-tariff barriers to influence each other’s trade policies.
The U.S. recently restricted China from importing semiconductors critical to its aerospace industry. China has blocked magnets made from rare earth minerals from reaching the U.S.
Modern cars contain dozens of the magnets, which help power electric motors and sensors. That can include the large motors that power electric cars, but also tiny components littered throughout internal-combustion-powered cars.
On May 9, Reuters reports, two large trade associations wrote to the president with a warning. Most major automakers are members of the Alliance for Automotive Innovation, which represents their interests in Washington, D.C.
Auto parts suppliers have a similar group, MEMA, The Vehicle Suppliers Association.
In a joint letter, the two told the White House, “Without reliable access to these elements and magnets, automotive suppliers will be unable to produce critical automotive components, including automatic transmissions, throttle bodies, alternators, various motors, sensors, seat belts, speakers, lights, motors, power steering, and cameras.”
Without those, the groups warned, America could see “a shutdown of vehicle assembly lines.”
One, Possibly Two Factories Already Paused
Car factories typically operate on a just-in-time basis, meaning that parts shipments are used as they arrive. A shortage of a single part can freeze work at an entire factory.
Related: Honda Factory Shows Complexity of Car Tariffs
The idea is no longer theoretical. Ford, The New York Times reports, paused production of its Explorer SUV for a week in April over a lack of magnets. A Ford spokesperson confirmed the shutdown to Kelley Blue Book, noting that the company used the week for planned factory maintenance.
Volvo, meanwhile, has paused production at a South Carolina facility building the Volvo EX90 and Polestar 3 electric SUVs. A company spokesperson told KBB the line paused “due to a supply chain issue,” but didn’t confirm that the problem involved magnets. Volvo resumed production on Saturday, May 31, he added.