---
title: "RESourceEU: Can Brussels Turn Von Der Leyen’s Plan Into The Industrial Muscle Europe’s Carmakers And Battery Makers Need?"
description: Brussels unveils ‘RESourceEU’ to cut reliance on Chinese rare earths and battery materials, weighing diplomacy and Anti-Coercion Instrument amid supply risk.
author: Darie Nani (Editor-in-Chief)
date: 2025-10-27T11:32:26.000Z
updated: 2026-03-31T13:19:56.364Z
canonical: https://www.sovereignmagazine.com/article/resourceeu-can-brussels-turn-von-der-leyen-s-plan-into-the-industrial-muscle-europe-s-carmake
image: https://cdn.nanimediahouse.com/7ea16771-6e83-4c41-8363-88204c617c91.jpg
categories: Supply Chains
content_type: Analysis
region: Berlin
publication: Sovereign Magazine
---

The European Commission will present a ‘RESourceEU plan’ to break EU dependence on Chinese critical raw materials, European Commission President Ursula von der Leyen announced at the Berlin Global Dialogue on 25 October 2025. ‘We are focusing on finding solutions with our Chinese counterparts,’ von der Leyen stated, before adding: ‘We are ready to use all of the instruments in our toolbox to respond if needed.’ The announcement comes after Beijing [tightened export controls on rare earths and battery materials](https://www.digitimes.com/news/a20251027PD200/taiwan-industrial-cost-net-zero-beijing-2025.html) earlier in October 2025.

Battery supply chains, electric vehicles and renewable technologies require secure access to [rare earths and battery materials](https://www.sovereignmagazine.com/article/from-clay-pits-to-ev-batteries-cornwall-proves-uk-can-make-battery-grade-lithium-now-the-hard) now, not in several years. With European automakers already struggling to meet 2025 emissions targets and battery gigafactories operating below capacity, the question becomes whether [Brussels can convert policy rhetoric](https://www.sovereignmagazine.com/article/china-s-climate-gambit-as-beijing-sets-ambitious-2035-targets-to-lead-global-energy-transitio) into the capital-intensive industrial projects that manufacturers need immediately.

## China’s Chokehold and October’s Pressure Point

China controls close to 70 per cent of global rare earths production and almost all refining capacity, according to the Commission’s announcement. [International Energy Agency data](https://www.iea.org/commentaries/with-new-export-controls-on-critical-minerals-supply-concentration-risks-become-reality) puts China’s share of rare earth refining at nearly 90 per cent. For finished rare earth magnets – essential components in EV motors and wind turbines – China’s dominance extends even further.

The October 2025 export controls triggered immediate industry effects: price volatility in neodymium and praseodymium markets, extended lead times for magnet supply, and potential bottlenecks in cathode and anode materials. Current market data shows lead times for rare earth magnets stretching beyond six months for European manufacturers. As we’ve previously explored, [China’s rare earth magnet controls expose deep vulnerabilities](https://www.sovereignmagazine.com/article/china-s-rare-earth-magnet-controls-why-manufacturers-can-t-count-on-a-quick-fix) in global manufacturing supply chains that cannot be quickly resolved.

## What RESourceEU Promises and What Remains Unclear

Von der Leyen outlined three core objectives: securing alternative sources across short, medium and long-term horizons; speeding up critical raw materials partnerships with Ukraine, [Australia](https://www.sovereignmagazine.com/article/eu-australia-trade-deal-critical-minerals), Canada, Kazakhstan, Uzbekistan, Chile and Greenland; and prioritising circular economy measures. ‘It starts with the circular economy. Not for environmental reasons. But to exploit the critical raw materials already contained in products sold in Europe,’ she explained.

What von der Leyen did not provide: no publication date, no legislative text, no budget figure, and no bill number. The [Critical Raw Materials Act](https://single-market-economy.ec.europa.eu/sectors/raw-materials/areas-specific-interest/critical-raw-materials/critical-raw-materials-act_en), which entered force in May 2024, already establishes targets and mechanisms for diversifying supply – raising questions about how RESourceEU would interact with existing legislation. This challenge reflects broader questions about [Europe’s ability to build sovereign industrial capacity](https://www.sovereignmagazine.com/article/european-digital-stack-can-europe-build-its-own-eurostack-for-digital-sovereignty) in strategic sectors.

## Brussels’ Response Options: Diplomacy or the Trade Bazooka

The diplomatic route remains Brussels’ preferred option. Von der Leyen confirmed that export controls will be discussed in upcoming meetings scheduled for next week, though no specific dates or venues have been announced.

The enforcement option centres on the [Anti-Coercion Instrument](https://policy.trade.ec.europa.eu/enforcement-and-protection/protecting-against-coercion_en) (ACI) – the EU’s strongest trade response tool. French President Emmanuel Macron explicitly called for triggering this ‘trade bazooka’ at Thursday’s EU leaders meeting, though his push lacks widespread support from other capitals. The ACI allows the EU to impose countermeasures including customs duties, trade restrictions, and limitations on foreign direct investment. Under its provisions, the Council adopts implementing acts by qualified majority voting – meaning no single member state can block action.

## The Timeline Problem: Years to Build, Months to Disrupt

Scaling up mining and refining capacity faces significant timeline constraints. Based on comparable EU projects under REPowerEU, permitting for new mining operations typically requires 18-24 months, while refinery construction adds another three to five years before reaching commercial production. Building recycling and refinement hubs could move faster – potentially two to three years – but would still leave Europe exposed to supply disruptions in the near term. The challenge extends beyond rare earths to other critical materials, with [copper shortages already threatening renewable energy goals](https://www.sovereignmagazine.com/article/global-copper-shortage-threatens-green-energy-goals-as-demand-soars) as demand soars for clean technologies.

Current EU battery gigafactory plans reveal the scale of the challenge. The [Automotive Cells Company](https://www.teslarati.com/mercedes-stellantis-joint-venture-battery-production/) joint venture between Stellantis, Mercedes-Benz and TotalEnergies operates facilities in France and Germany targeting 40 GWh annual capacity by 2030. Yet these facilities depend entirely on imported magnets and precursor materials, primarily from China. The collapse of Northvolt, once Europe’s battery champion, and its subsequent acquisition by US firm Lyten underscores the financial pressures facing the sector. This reflects broader dynamics in the global [battle for sustainable energy storage dominance](https://www.sovereignmagazine.com/article/battery-wars-battle-for-dominance-in-sustainable-energy-storage-heats-up) between the US, China and Europe.

## The Missing Element: Money

No budget figure has been attached to RESourceEU. The [REPowerEU package](https://www.reuters.com/business/autos-transportation/auto-companies-in-full-panic-over-rare-earths-bottleneck-2025-06-09/) mobilised €225 billion through a combination of EU budget lines, state aid relaxation, and private capital mobilisation. Without a similar financial commitment, RESourceEU risks remaining a statement of intent rather than an industrial transformation programme.

## Industry and Member State Divisions

European manufacturers face immediate decisions about [supply chain resilience](https://www.sovereignmagazine.com/article/britain-courts-eu-steel-club-to-dodge-50-tariff-a-post-brexit-paradox-with-real-risks-for-uk-). Stellantis has already invested in Niron, a US company developing rare-earth-free magnets, signalling one potential pathway. Major automakers including Volkswagen and battery makers must now weigh the costs of continuing Chinese dependence against expensive alternatives that may take years to materialise.

Member state positions remain divided. France’s Macron has publicly urged triggering the Anti-Coercion Instrument, viewing Chinese export controls as economic warfare. Germany, with its extensive automotive sector exposure to China, has remained notably silent on supporting trade measures. Poland and the Baltic states generally favour stronger action, while southern European capitals worry about potential Chinese retaliation affecting their exports.

## Two Paths Forward

A pragmatic scenario sees the Commission combining measured diplomacy with accelerated recycling initiatives, targeted finance for demonstration projects, and gradual partnership development with Australia, Canada and other suppliers. [This approach could blunt China’s leverage](https://www.sovereignmagazine.com/article/nickel-and-coal-indonesia-is-setting-its-own-terms) over five to seven years while avoiding trade war escalation.

The high-risk pathway involves slow delivery of new supply chains, forcing European manufacturers to accept higher costs and production delays. Without rapid recycling capacity or alternative suppliers, the EU’s 2030 climate targets and 2025-2030 EV deployment schedules face serious jeopardy. This challenge comes at a time when [energy giants are already abandoning climate pledges](https://www.sovereignmagazine.com/article/the-great-green-retreat-why-energy-giants-are-abandoning-climate-pledges), raising fundamental questions about the pace of green transformation. Brussels faces a specific policy choice: immediate, expensive industrial investment versus continuing exposure to a supplier concentrated beyond Europe’s control. The coming months will reveal whether [genuine industrial policy](https://www.sovereignmagazine.com/article/eu-s-2035-combustion-engine-ban-reversal-balancing-climate-goals-and-industrial-survival) or merely another Brussels acronym.