BERLIN, June 3 (Reuters) — China’s tightening grip on rare earth exports could soon disrupt car production in Germany, the country’s auto industry lobby warned, citing delays in critical component supplies that rely on the essential materials.

In a statement to Reuters, Hildegard Mueller, head of Germany’s VDA auto lobby, said prolonged delays in export license approvals and customs clearance for rare earths—even those with valid licenses—are already preventing suppliers from manufacturing key parts. These parts, which range from windshield-wiper motors to anti-lock braking system sensors, are vital for keeping production lines moving.

It marks the first time the VDA has formally warned that car manufacturing in Germany may be forced to halt due to supply shortages.

Mounting Global Concern

Mueller’s warning comes amid growing international concern over China’s new export regulations for rare earth magnets, imposed in April. The rules require exporters to secure specific licenses from Beijing—a process many say has become slow and unpredictable.

Sources told Reuters that diplomats and executives from Europe, India, and Japan are urgently seeking talks with Chinese officials to push for swifter approvals.

China dominates the global rare earth market, and alternative suppliers remain scarce. That gives Beijing considerable leverage in trade and geopolitical negotiations.

Automotive trade groups across the U.S., Europe, and India—representing major manufacturers including General Motors, Toyota, Volkswagen, and Hyundai—have also raised the alarm. They warn that without a steady supply of rare earths, components like sensors, cameras, and transmissions could face production bottlenecks, potentially leading to factory shutdowns within weeks.

Limited Relief So Far

China has issued some export licenses to a few rare earth producers, including those supplying parts to Volkswagen. But that’s not nearly enough to sustain uninterrupted production, Mueller said.

German auto parts giant Bosch also voiced concern last week, stating that its suppliers are struggling with China’s more stringent export license procedures.

“If the situation doesn’t improve soon, we could see production delays—and even complete stoppages,” Mueller warned.