China May Hold Key to U.S. Automotive Industry’s Future

Mom was right when she said, “Be careful what you wish for.” A recent editorial in Industrial Heating magazine details one serious consequence of the push for more hybrid and pure electric vehicles in the U.S., – the further empowerment of China on the Toyota_Priusworld stage. You see, it turns out that China accounts for 97% of the world’s production of rare-earth metals, several of which are used heavily in the production of hybrids like the Prius, Insight and others.

To produce a Toyota Prius requires anywhere from 24-35 pounds of neodymium, dysprosium, and lanthanum – all rare-earth metals – and that number will only increase as greater fuel efficiencies are sought in the coming years. Those same REs are also used to produce LCD screens, computer hard drives, fiber optic cables, digital cameras, and medical imaging devices, which is another reason why demand for REs is soon expected to drastically exceed supply unless new production sources are found.

Proponents of increased CAFE standards (and the hybrid and electric vehicles that go along with those higher standards) frequently reference the need to end U.S. dependence on “foreign oil,” but I’m not sure they realize that in doing so, we may be simply trading one dependency for another. Perhaps the biggest irony is that the U.S. was once the largest producer of REs before strict environmental regulations led to the death of the industry in the U.S. As the author points out, “what is now being required by the green movement and our government was run out of this country by the same folks just over a decade ago.”

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