China has recently granted rare earth export licenses to GM (NYSE:GM), Ford (NYSE:F), and Stellantis (BIT:STLAM) but notably excluded Tesla (NASDAQ:TSLA), raising concerns that Tesla may be deliberately targeted amid ongoing trade tensions and CEO Elon Musk’s outspoken foreign policy views.
According to Wells Fargo, citing expert Dr. Gracelin Baskaran, Tesla and Rivian are still awaiting export licenses. This may reflect China’s strategy to support domestic EV manufacturers while limiting access for foreign rivals.
China dominates nearly 100% of the global supply of seven critical heavy rare earth elements (REEs), essential for electric vehicle engines and advanced manufacturing. Although the U.S. auto sector is the largest consumer, its usage is only a small fraction of global production—about 6,600 tons out of 390,000 tons produced last year.
China’s April restrictions left automakers with just 2–3 months of buffer stocks, which are now running low. While some U.S. automakers have managed to continue operations through furloughs, Wells Fargo warns this is “a Band-Aid, not a solution.” Supply risks may persist for two to five years as new production capacity outside China develops.
For now, China’s selective licensing and monitoring of end-use means Tesla and other manufacturers still waiting for access could face ongoing pressure until global rare earth supply chains become more diversified.
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