Forward-looking layout to address rare earth dependence, General Motors Company (GM.US) will become the only American car manufacturer with multiple domestic magnet suppliers.

At a time when China is strengthening its export controls on rare earths, the US government and companies are actively taking action to avoid supply chain disruptions. General Motors Company (GM.US) has been working since 2021 to secure domestic rare earth magnet supply. It is expected to become the only American automaker with direct supply sources from multiple factories on a large scale in the coming months. At the end of 2021, General Motors Company announced plans to build a rare earth magnet manufacturing plant in the United States with German company VAC. VAC CEO Eric Eichen stated last month that the South Carolina plant is expected to start production this autumn and reach full capacity production by early 2026, with up to 90% of its output supplying General Motors Company and the remaining portion supplying the US Department of Defense. In 2021, General Motors Company also signed a long-term supply agreement with MP Materials (MP.US) and agreed to invest in the construction of a new factory for this rare earth mining company in Texas. The US Department of Defense subsequently announced funding for VAC and MP's new factories. Senior Pentagon official Anthony DeStasio stated last year that "if they only supply the Department of Defense, they may not last 5 to 10 years," but "if they supply both the Department of Defense and General Motors Company, the future will be much more stable." In July of this year, the Department of Defense agreed to invest $400 million in MP in exchange for shares to help increase its production capacity. General Motors Company has also reached a multi-year supply agreement with Noveon Magnetics, and rare earth magnets have been delivered since July. Hillpan Amin, GM's purchasing and supply chain manager, did not disclose the percentage of the company's demand for rare earth magnets that can be met by domestic production in the United States.