The year 2025 has exposed a persistent vulnerability in the automotive supply chain: Ford Motor Company's critical dependence on the steady flow of rare earth minerals, particularly from China. This disruption has forced the company to adopt a day-by-day operational approach, with temporary shutdowns at some U.S. factories.

CEO Jim Farley admitted in a Bloomberg interview: “It’s day to day… We have had to shut down factories. It’s hand-to-mouth right now.” One of the affected sites was the Chicago plant, where production of the Explorer model was halted for a week in May. According to CBS News and Bloomberg, nearly 90% of the rare earths used by American automakers come from China.

The issue escalated in April when Beijing implemented new export license requirements and restrictions, significantly reducing shipments of permanent magnets—vital components for electric motors and auxiliary systems. Within weeks, global exports of these materials were halved.

The impact goes beyond Ford. Industry groups such as MEMA and manufacturers like GM, Toyota, and Volkswagen warned that shortages of critical components—sensors, alternators, seatbelt systems—could shut down entire production lines. In Europe, similar disruptions have already triggered factory suspensions.

In response, Ford and other automakers are scrambling to find alternative sources. European companies like Rainbow Rare Earths are exploring new mining projects in South Africa, though full-scale production isn’t expected before 2027. Meanwhile, the U.S. is increasing investment in partnerships with countries like Australia and Canada to diversify supply.

New refineries and processing plants are also being developed in states like Oklahoma, with federal support aimed at reducing dependence on Chinese imports. However, experts caution that long-term solutions will require sustained investment and international coordination at the G7 level.

Conclusion

The past quarter has made one thing clear: relying on a single supplier for rare earth elements renders even the most established factories vulnerable. For Ford, this has become an immediate operational challenge. For the industry at large, it represents a call to rethink global sourcing strategies and build greater resilience. The future of sustainable, independent auto manufacturing depends as much on lithium and cobalt as it does on controlling the strategic flow of critical raw materials.