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European car manufacturers are interacting with Western magnets and rare earth companies because they want to secure alternative sources of important materials between a decrease by Chinese export restrictions.

Rare Earth is important for car manufacturers because they are used in permanent magnets in electric vehicles motors as well as other components found in all cars. China, which dominates the supply and processing of materials, tightened the export control in April, in response to the growing American tariff war.

According to a person familiar with the talks, the Mercedes-Benz of Germany is interacting with the rare earth of Britain to secure future production from his South African mine.

Rainbow, which is supported by the US government -owned mining company Techmet, expects to start production of rare earth in 2027 that will end in permanent magnets.

Mercedes refused to comment. Rainbow said that “Discussions continue to be discussed with various types of industry participants, including automakers and global trading companies.”

Frank Acard, the chief executive of the German magnet manufacturer Magnosphere, stated that Porsche and other car manufacturers had asked for additional supply to avoid closing the production lines in the coming weeks.

“Everyone started calling and said, ‘Can you give us 2,000 magnets because our line is still going to stand. The price is not an issue – let’s talk about what you can do, when we can have, and how can you do it.’ This is just incredible, ”said Acard.

Porsche refused to comment on his suppliers.

Eckard predicted that car production would be stopped by mid -July until companies could find alternative sources for magnets.

The lack is not limited to Europe – Ford in May temporarily prevented production at its sports utility vehicle plant in Chicago due to lack of magnets.

Some companies are asking Magnosphere, which uses rare earth content to produce their magnets from China, if it will be able to make them without relying on the Chinese supply, according to Acard.

Analysts at Berenberg said on Thursday that geopolitical quarrel over metals “will catalyze investment in non-sugar supply chains”, expecting profit with companies including rainbow.

Car authorities have repeatedly warned that the stockpiles of rare Earth Magnets will last for a few weeks to a few months.

One of some exceptions is Hyundai. South Korean car manufacturer and its sister company Kia told investors that they have rare earth stockpiles that run till the end of the year, according to two people according to the knowledge of discussion.

“As part of our standard business practices, we maintain suitable inventory levels to support uninterrupted production. We do not disclose specific inventory details or purchase strategies,” Hyundai said.

Even though European car manufacturers secure the rare earth mined from outside China, however, most magnets are in Asia.

“Until Europe becomes real about making permanent magnets, we are not going to solve the problem,” said an executive.

Beijing has recently agreed to approval rapid track approval for rare earth export licenses for some European companies that its new license system for rare Earth and related magnets took the risk of having a comprehensive factory stagnation and disruption in global supply chains.

But industry officials have said that manufacturers may still face delay in obtaining their rare earth and magnet shipments due to the backlog of license applications.

Even for companies such as Volkswagen, who have already obtained licenses from China, it will take weeks or months even before the shipment arrives.

Additional Reporting by Song Jung-A in Seoul