Automakers Are Scrambling For Magnets

Happy Monday! It’s June 9, 2025, and this is The Morning Shift — your daily roundup of the top automotive headlines from around the world, in one place. This is where you’ll find the most important stories that are shaping the way Americans drive and get around.

In this morning’s edition, we’re looking at the fallout of China’s ban on rare-earth magnet exports and the United States’ tax on vehicle imports. Plus, Chinese EVs could hit Europe soon, and private equity could kill a major Stellantis and Nissan supplier. 

Modern cars are chock-full of magnets, which is great news if you’re the guy selling the magnets. Unfortunately for much of the world, that guy is Xi Jinping, and he’s not too keen on letting any of those precious rare-earth materials out of the country. Instead, he’d like you to set up your magnet-based shops in China. From Reuters:

Frank Eckard, CEO of a German magnet maker, has been fielding a flood of calls in recent weeks. Exasperated automakers and parts suppliers have been desperate to find alternative sources of magnets, which are in short supply due to Chinese export curbs.

Some told Eckard their factories could be idled by mid-July without backup magnet supplies. “The whole car industry is in full panic,” said Eckard, CEO of Magnosphere, based in Troisdorf, Germany. “They are willing to pay any price.”

…

Several European auto-supplier plants have already shut down, with more outages coming, said the region’s auto supplier association, CLEPA.

“Sooner or later, this will confront everyone,” said CLEPA Secretary-General Benjamin Krieger.

Cars today use rare-earths-based motors in dozens of components – side mirrors, stereo speakers, oil pumps, windshield wipers, and sensors for fuel leakage and braking sensors.

Automakers are going to need to make a lot of deals in not a lot of time, unless they’d like their supply chains to dry up and their factories to go idle. This is, in business terms, generally seen as “bad.” 

While China is cutting exports, the United States is cracking down on imports. After President Trump’s tariffs took hold, automakers got very reluctant to ship cars to the U.S., for fear of incurring fees at the port. Now we’re seeing the results of that reluctance: A 72% drop in global auto shipping. From Automotive News:

The volume of cars getting shipped to the U.S. via sea routes has plunged as a result of President Donald Trump’s tariffs on imported vehicles.

Maritime import volume for motor vehicles dropped by 72.3 percent in May compared with the same month a year earlier, according to Descartes Datamyne, a trade database.

…

The precipitous drop indicates that vehicle tariffs are having a concrete impact on automaker decisions. The 25 percent auto tariffs that took effect in April may have prompted companies shipping completed automobiles overseas to hold off, betting that Trump will eventually pull back the most punishing duties.

Given the iron law of supply and demand, don’t expect car prices to go down any time soon. A drop like this will likely affect the used market too, as buyers priced out of new cars start browsing Marketplace for their next ride and driving up demand there. Are you tired of winning yet?

The EU instituted major tariffs on Chinese EVs back in 2024, trying to keep them from undercutting the European market. Now, Europe is altering the deal: Rather than tariffs, the bloc is looking to institute a minimum-price rule for EVs out of China. Now, that rule is nearing completion, according to Bloomberg: 

China’s commerce ministry said talks with the European Union on setting minimum prices for Chinese-made electric vehicles have “entered final stages,” although more work is required to reach a deal.

The two sides are hammering out an agreement after the EU imposed steep tariffs on Chinese EV imports last year, alleging state subsidies gave the country’s vehicles an unfair advantage.

Everyone’s afraid of China right now, it seems. I take it we’re not dominating them in the marketplace of ideas at the moment. 

Marelli, an auto parts supplier that makes lighting, electronics, interior parts, and more for Nissan and Stellantis, is looking at filing for Chapter 11 bankruptcy. Nissan and Stellantis still needs lights, electronics, interiors, and more, so what changed for Marelli? Well, it seems the answer is the same as every other industry: Private Equity. From Automotive News:

Marelli Corp., a Japanese auto supplier owned by U.S. private equity firm KKR, is considering filing for Chapter 11 bankruptcy protection in the U.S., Kyodo news agency reported on June 7, citing unnamed sources.

Marelli, a key supplier to embattled Japanese automaker Nissan Motor Co. and Stellantis, is looking into the Chapter 11 option to ensure its business operations won’t be halted even if its restructuring talks with creditors fall through, Kyodo said.

Private equity has never benefitted the world in any meaningful way, but has an incredible track record for leeching money out of good businesses until they wither and die. Then, of course, the private equity vampires take off for another company and repeat the process — forever enriching themselves at the cost of the livelihood of every worker at every company they kill. These people are leeches and cannot be trusted. 

I mean, c’mon. It’s the CIA we’re talking about. Do you know how unreasonable you have to be acting for the CIA to say you’re going too far?

New Purity Ring baby, let’s go. If “many lives” presages a new album with this sound, then I’m all in. This rocks.