Tesla Patent Could Solve China’s Export Restrictions on Rare Earth Metals

This article does not provide investment advice. The author holds no positions in the stocks referenced.

US-China Trade Tensions: A High-Stakes Standoff

The ongoing trade conflict between the United States and China has escalated, marked by escalating rounds of retaliatory tariffs and strategic measures. Central to this tension are the United States’ restrictions on semiconductor exports and China’s recent prohibition on exporting rare earth metals. This volatile environment poses significant challenges for American supply chains that rely on these critical materials.

China has suspended exports of certain rare earth minerals and magnets to the US and around the world.

China is drafting a new regulatory approach to the minerals to prevent them reaching American companies pic.twitter.com/WX8Uh89gkO

— unusual_whales (@unusual_whales) April 13, 2025

China’s Strategic Move Against Rare Earth Exports

In response to the punitive tariffs imposed during the previous U. S.administration, which currently reach an effective rate of 104% (down from an initial 145%), China has temporarily halted the exportation of rare earth metals. This policy aims to choke supplies to U. S.military operations and associated industries, as Beijing formulates a strategy to limit American access to these essential resources.

Not the ones that produce the rare earth metals and nowhere near the amount the modern world needs to sustain itself.

Having an industry that can support the refinement of rare earths requires a massive amount of centralized planning and state policy investment into creating the…

— Yakubian Thought and Theory (@Mind_of_yakub) April 14, 2025

The Challenge of Rare Earth Metals in the U. S.Industry

Rare earth metals play a pivotal role in various industries, especially in producing magnets for electric vehicles and other technologies. Contrary to popular belief, the U. S.cannot quickly initiate its own rare earth refinement processes due to the substantial investments of capital, energy, and infrastructure required. While domestic production is a possibility, establishing a sustainable supply chain could take nearly a decade.

Slitted Magnet for Selective Coercivity: Tesla’s Novel Approach to Rare Earth Metal Reduction @Tesla‘s WO2024097176A1 patent introduces an innovative magnet manufacturing technique that transforms electric vehicle motor production through strategic cavity-based doping. By… pic.twitter.com/tZcaJ03OPG

— SETI Park (@seti_park) December 4, 2024

Innovative Solutions: Tesla’s Approach

Amidst these strategic challenges, one potential solution involves minimizing reliance on rare earth metals in key industrial applications. Tesla’s recent patent, filed in 2023 under the publication number WO2024097176A1, outlines a revolutionary method for producing electric vehicle motors with significantly reduced rare earth content.

This method employs a “keyhole surgery-like process”that creates controlled-depth cavities within the magnet structure, allowing the introduction of specific dopants. By enhancing the magnetic properties while minimizing the use of rare earth materials, this innovative technique could ease America’s dependency on foreign supplies.

While it remains uncertain whether Tesla has implemented this approach in its Gigafactories, its simplicity and effectiveness present a promising pathway towards de-risking the convoluted American supply chain.

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