As China strengthens export controls on rare earths, the US government and companies are actively taking measures to prevent supply chain disruptions. General Motors (GM.US) has been securing domestic rare earth magnet supplies since 2021 and is expected to become the only US automaker with multiple large-scale direct supply sources from domestic facilities in the coming months.

In late 2021, General Motors partnered with German company VAC to announce plans for building a rare earth magnet manufacturing facility in the United States. VAC CEO Eric Eschen stated last month that the South Carolina plant is expected to begin production this fall and reach full capacity by early 2026, with up to 90% of its output supplying General Motors and the remainder going to the US Department of Defense.

In 2021, General Motors also signed a long-term supply agreement with MP Materials (MP.US), agreeing to invest in the rare earth miner's new facility in Texas. The US Department of Defense subsequently announced funding for both VAC's and MP's new plants. Senior Defense Department official Anthony Di Stasio stated last year that "if they only supplied the Department of Defense, they probably wouldn't survive 5 to 10 years," but "if they supply both the Department of Defense and General Motors, the outlook would be much more stable."

In July this year, the Department of Defense agreed to invest $400 million in MP in exchange for equity stakes to help boost its production capacity. General Motors has also reached a multi-year supply agreement with Noveon Magnetics, with rare earth magnet deliveries beginning in July.

General Motors' Chief Procurement and Supply Chain Officer Shilpan Amin declined to disclose what percentage of the company's rare earth magnet demand can be met by domestic US production.