General Motors (GM) has signed a new agreement with U.S.-based rare earth manufacturer Noveon Magnetics, marking the third contract it has secured with a domestic supplier of the critical materials.
The multi-year deal will supply GM with rare earth magnets used in a wide range of components for its full-size SUVs and trucks. Noveon, which is based in Texas, began production earlier this year, and its first magnet shipments to GM started in July.
“Working with domestic manufacturers like Noveon allows us to increase the resiliency of our supply chain while supporting American jobs and strengthening our industry and economic security,” said Jeff Morrison, GM’s global chief procurement officer.
“Noveon’s magnets will support our most popular vehicles and help continue to deliver a leading portfolio of choice for our customers.”
GM has previously signed deals with Nevada-based MP Materials (MP) and South Carolina-based Vacuumschmelze GmbH.
With these three partnerships in place, GM says it can now source the majority of its rare earth materials from domestic suppliers, significantly reducing its dependence on China.
That’s become a national priority. The Trump administration has been pushing to accelerate U.S. production of rare earths after Beijing temporarily halted exports in retaliation for tariffs.
China currently supplies about 90% of the world’s rare earths.
In response, the White House is reportedly crafting an “Operation Warp Speed”-style plan to fast-track domestic rare earth production — borrowing the same emergency framework used to accelerate COVID-19 vaccine development during Trump’s first term.
Following a trade truce earlier this summer, China briefly increased rare earth exports by 158% in June, with some of that supply heading to the U.S., according to Bloomberg.
But despite the truce, The Wall Street Journal reports that China continues to restrict exports of rare earths used in Western defense systems.
As a result, some defense firms are now paying up to five times more than they previously paid China to secure alternative sources.
With the truce set to expire on Aug. 12, U.S. and Chinese leaders have held multiple meetings — first in London in June, and again in Stockholm last week — in hopes of securing an extension.
U.S. Trade Representative Jamieson Greer told Face the Nation on Sunday that negotiations are close. “China has put a global control on the world,” he said. “We’re focused on making sure the flow of magnets and adjacent supply chains can move as freely as before. I’d say we’re about halfway there.”
Trump chimed in on the matter Tuesday, saying the U.S. is “getting very close” to extending the deal.
GM’s stock is essentially flat for the year, down just over 1%.
Your email address will not be published. Required fields are markedmarked