Rare Earth Crisis: China's Export Curbs Hit European Automotive Industry

Due to a shortage of rare earth elements, many automotive supplier factories in Europe have halted production. China's export restrictions, which began in April 2025, have disrupted the supply chains of major brands such as VW, Mercedes, and BMW. According to CLEPA, only 25% of the required export licenses in China have been granted. If the situation does not improve, more production halts are expected.

So, what’s going on? China, which controls 90% of the global rare earth market, is effectively telling the West — which has imposed trade restrictions on it — “Without me, you can't produce cars, wind turbines, robots, night vision optics, or many electronic products.” This is a geopolitical show of strength, positioning China to sit at the global diplomatic table with greater leverage. For years, politicians ignored industrialists warning that “industry is critical,” but now, at the negotiating table with China, they will feel the full weight of China’s industrial muscle.

What about Turkey? We are in a similar position. From the automotive industry to energy and defense, Turkey is heavily dependent on China. This crisis is not just a warning for Europe, but for Turkey as well.