China sweeping restrictions on rare earth exports threaten the U.S. defense industry, providing President Xi Jinping with a powerful leverage over President Donald Trump in upcoming trade talks.
Beijing will not allow the export of rare earth materials for use by foreign militaries, China’s Ministry of Commerce announced on Oct. 9. These are the first restrictions imposed by China that specifically target the defense sector, according to Gracelin Baskaran, a critical minerals expert at the Center for Strategic and International Studies.
“What this essentially means is that it will deny licenses to foreign militaries and companies that are producing military use end goods,” Baskaran told CNBC. “It undermines the development of the defense industrial base at a time when there is rising global tension. It is a very powerful negotiating tactic because it undermines national security.”
Rare earth magnets are crucial components in U.S. weapons systems such as the F-35 warplane, Virginia and Columbia class submarines, Predator drones, Tomahawk missiles, radars, and the joint direct attack munition series of smart bombs, according to the Department of Defense.
China dominates the global supply chain for rare earths. It controls 60% of mining and more than 90% of refining worldwide, according to the International Energy Agency. The U.S. is dependent on China for around 70% of its rare earth imports, according the U.S. Geological Survey.
“It’s scandalous that we don’t have a rare earths strategic reserve, that we let China monopolize 90% of the refining of rare earth materials,” Jeremy Siegel, University of Pennsylvania professor emeritus of finance, told CNBC on Monday. “Where were we?”
‘Massively disruptive’
Beijing also imposed broad controls that require foreign companies to obtain an export license if rare earths processed in China make up as little as 0.1% of their products’ value. Firms also need licenses for products that rely Chinese rare earth technology for mining, smelting, separation, magnet manufacturing and recycling.
“If these rules were to be strictly and indefinitely enforced, they would be massively disruptive, not just to the US but globally,” Wolfe Research analyst Tobin Marcus told clients in an Oct. 10 note. Rare earths are also also crucial inputs for the semiconductor and automobile industries.
The restrictions would impact every sector of the U.S. economy but the defense, semiconductor and electric vehicle industry would face the brunt, according to Alicia Garcia Herrero, an economist at French investment bank Natixis. Defense contractors, Apple, Nvidia, Intel, Tesla, Ford and GM are all highly exposed, Hererro told clients in a Monday note.
The Trump administration is working to build out a domestic supply chain. The Defense Department struck an unprecedented deal with the largest U.S. rare earth miner MP Materials in July that included an equity stake, price floors and an offtake agreement.
“This will certainly also further accelerate US efforts to develop our own rare earth resources,” Marcus said. U.S. rare earth stocks have surged as investors speculate that the Trump administration will strike deals with other miners.
Standoff in South Korea
The restrictions threaten to reignite the trade war between the China and the U.S. after months of relative calm.
Trump has responded with 100% tariffs on Chinese goods starting Nov. 1. The huge import taxes would come on top of the 44% tariff rate already in place on China, effectively cutting off trade between the world’s two largest economies, according to Wolfe Research.
“It wouldn’t take much re-escalation to get us back to the quasi-embargo situation that prevailed in the spring,” Marcus told clients.
The U.S. stock market erased about $2 trillion in value Friday after Trump threatened massive tariffs against China, according to Bespoke Investment Group. The S&P 500 rallied Monday to regain more than half of Friday’s losses after Trump appeared to de-escalate, saying “it will all be fine” with China.
Trump and Xi are still expected to meet on the sidelines of the Asia-Pacific Economic Cooperation summit in Seoul, South Korea later this month, Treasury Secretary Scott Bessent told Fox Business on Monday.
The most likely scenario is “both sides pull back on the most aggressive policies and that talks lead to a further—and possibly indefinite—extension of the tariff escalation pause reached in May,” Goldman Sachs told clients Sunday.
But Beijing’s strategy is unclear and the tariff deadline is just weeks away, raising the risk that an agreement might not be struck in time, Marcus said.
“Without more conviction about Beijing’s strategy here, we’re concerned that they won’t be willing to back down fast enough to prevent these 100% tariffs from kicking in, at least temporarily,” the analyst said.
Waymo has poached a top Tesla audio engineer to lead the In-car Audio and Infotainment experience inside its autonomous vehicles.
Tesla and Waymo have a sort of rivalry as they are both working toward deploying autonomous driving systems.
Earlier this year, there was a little back and forth about having the biggest service area in Austin, even though the competition was sort of unfair since Waymo has been opreating a true level 4 autonmous driving system in the Texas capital while Tesla’s Robotaxi system is still being supervised by employees inside the vehicles.
Now, we learn that Waymo has poached Nikhil Satish, a top audio engineer from Tesla.
He announced on LinkedIn last week:
I’m happy to share that I’m starting a new position as Technical Leader of Audio Systems at Waymo!
Satish already had an extensive career in audio engineering with NVIDIA and Amazon before joining Tesla in 2021.
At Tesla, Satish led the audio engineering of the Cybertruck, which has been praised for its audio system.
The company even noted it yesterday:
More recently, he also led audio engineering on Tesla’s semi truck and humanoid robot programs, according to his LinkedIn profile.
Now, he will be the technical lead for in-car audio and infotainment experience at Waymo.
While Waymo’s core technology is autonomous driving, the audio and video experience is expected to be increasingly important as passengers can put their attention toward other things than driving.
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GM is suddenly shaking up electric vehicle production plans after issuing a stark warning. The automaker warned that new US policy changes, including killing off the $7,500 EV tax credit, will cost it at least $1.6 billion.
GM shifts plans as the EV tax credit expires
Although GM set another record by delivering 66,501 electric vehicles in the third quarter, it’s bracing for a much different market over the next few months.
In an SEC filing on Tuesday, GM said that “following recent US Government changes, including the termination of certain consumer tax incentives for EV purchases and the reduction in the stringency of emissions regulations, we expect the adoption rate of EVs to slow.”
Although it didn’t reveal specifics, GM said the policy changes “have caused us to reassess our EV capacity and manufacturing footprint.”
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The changes do not impact Chevy, GMC, and Cadillac electric vehicles currently in production, and GM expects they will remain available for buyers.
The “strategic realignment” will cost it at least $1.6 billion. GM said $1.2 billion of the charges will be non-cash as it adjusts EV capacity. The other $400 million is primarily due to contract cancellation fees and “commercial settlements associated with EV-related investments,” according to GM’s filing. That will have a cash impact.
2025 Chevy Equinox EV LT (Source: GM)
GM is also reassessing investments in battery manufacturing. The company said discussions are still ongoing, adding that it’s “reasonably possible” it will absorb additional costs due to the changes.
The charges, which were approved by the board on October 7, will be included in GM’s third-quarter earnings. We will learn more when GM reports Q3 earnings results next week on October 21.
Cadillac Optiq EV (Source: Cadillac)
Although GM and crosstown rival Ford were planning to launch programs designed to extend the $7,500 EV credit, both have since abandoned those plans. Instead, GM will provide about $6,000 of its own cash for a limited time to support EV leasing.
Electrek’s Take
Through the first nine months of 2025, GM sold 144,688 EVs, more than double the amount it sold in the same period last year.
The Chevy Equinox EV has been GM’s biggest hit, ranking as the third best-selling EV behind the Tesla Model Y and Model 3. Cadillac was the leading EV luxury brand in Q3 with three of the top 10 most popular models in the segment: the Lyriq (#2), Optiq (#5), and Vistiq (#6).
GMC is on pace for its best year ever, with the new Sierra EV rolling out and demand for the Hummer EV picking up. With the $7,500 EV tax credit now expired, GM, like most automakers, is preparing for slower EV adoption in the US.
The policy changes, including dropping the $7,500 tax credit, will only put the US further behind China, South Korea, and others leading the global push for electric vehicles.
We should learn more about GM’s updated EV production plans next week when it reports Q3 earnings on October 21. Check back for updates.
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What if your morning commute didn’t involve gridlock on the 395 or the Orange Line crawl, but instead meant silently flying over the Potomac River at 30 knots? That’s exactly what Stockholm-based Candela is bringing to Washington D.C. this week with the U.S. demo debut of its flying electric boats.
While it doesn’t appear to be a permanent route nor make use of the company’s latest flagship commercial vessel, the P-12 shuttle, the demonstration set up near the Swedish embassy will illustrate just how effective the alternative commuting method truly is.
Starting October 17th, Candela will be showcasing media test rides on the Potomac using its C-8 flying vessel to demonstrate how its revolutionary electric hydrofoil ferry – the Candela P-12 – could transform city commutes. With wings hidden beneath the water and a high-tech flight controller regulating the ride, the P-12 lifts out of the water and literally flies above the surface, reducing drag by 80% and gliding without creating a wake.
The demonstration underscores how this level of speed and efficiency could actually change how people move around the D.C. metro area. A typical commute from Georgetown to Reagan Airport? By car, that’s around 20 minutes. On public transit, 37. On the P-12? Just six minutes. Similarly, a water ride from Alexandria to The Wharf would be a quick and quiet 10-minute journey – likely faster than your rideshare app can even find a driver during rush hour.
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The Candela P-12 is more than just a speedy commuter; it’s also quiet, clean, and surprisingly comfortable. Its computer-controlled hydrofoils make for a ride that’s smooth enough to prevent seasickness, and the onboard C-POD electric motor hums along with no noise or vibration. With no slamming into waves and no diesel fumes to choke on, the whole thing feels more like riding a luxury train than a boat.
And while this might sound like the kind of futuristic tech you’ll hear about once and never again, Candela is already proving this model works. In Stockholm, the P-12 has already been integrated into the city’s public transport system, where it’s cut some routes’ travel times in half and delivered a quieter, cheaper, and greener commute. Similar projects are in the works for Lake Tahoe, Mumbai, Thailand, and Saudi Arabia – with more than 40 boats already on order, making it the best-selling electric passenger vessel in the world.
Candela says operating costs are about 60% lower than diesel-powered vessels, which puts them in line with land-based mass transit options like buses. In cities like D.C., where shoreline erosion and speed restrictions limit traditional ferries, the P-12’s wake-free cruising means it can get exemptions and run at high speeds even in no-wake zones. That opens up a whole new layer of transport.
“We’re not merely replacing diesel ferries — we’re enabling a new layer of transport by utilizing the underused waterways,” said Gustav Hasselskog, Candela’s founder and CEO. “We’re already in discussions with several U.S. companies that see the potential of using flying electric vessels to bypass congestion.”
The Washington D.C. demo is timed to coincide with the Swedish Green Transition Summit, a forum focused on sustainable innovation, and will run through October 23rd from a launch site adjacent to the Swedish Embassy. It’s part marketing, part diplomacy, and part real-world proof of concept that urban waterborne transit doesn’t have to be slow, loud, or dirty.
For a city surrounded by rivers and plagued by congestion, Candela’s pitch is clear: don’t pave more roads – just fly over the water. If the P-12 delivers in D.C. the way it has in Sweden, this could be the start of an entirely new commute for many more U.S. cities.
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