Rare Earth Elements Market Set to Reach 260.36 Kilotons by 2030, Driven by Demand from Clean Energy and Electric Vehicles

Mordor Intelligence has published a new report on the "Rare Earth Elements Market" offering a comprehensive analysis of trends, growth drivers, and future projections

Introduction
The global Rare Earth Elements (REE) market is poised for substantial growth over the next several years. From a market size of 196.63 kilotons in 2025, it is projected to reach 260.36 kilotons by 2030, growing at a compound annual growth rate (CAGR) of 5.80%. This expansion is primarily fueled by the increasing demand from industries such as clean energy technologies, electric vehicles (EVs), and consumer electronics. The Asia-Pacific region continues to dominate the market, accounting for approximately 86% of global production, but North America and Europe are making significant strides in developing their own supply chains. This shift towards diversification is expected to reduce reliance on China, which has long been the leading supplier of REEs.

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Key Trends

Rising Demand from Electric Vehicles (EVs)

One of the key drivers of the rare earth elements market is the rapid growth of the electric vehicle industry. REEs, particularly neodymium, are essential for producing high-performance magnets used in EV motors. As the automotive industry increasingly adopts electric vehicles, the demand for these critical materials is expected to rise sharply. Neodymium-based magnets are expected to see substantial growth, with this segment anticipated to grow at a CAGR of 9.20% through 2030. The increasing adoption of EVs across global markets is transforming the demand dynamics for REEs, and automakers are focusing on securing a reliable supply of these materials.

Clean Energy Transition

The global push towards renewable energy is another significant factor driving the demand for rare earth elements. REEs are used in various clean energy technologies, including wind turbines and solar panels. For instance, the neodymium iron-boron (NdFeB) magnets used in wind turbines are integral to the development of sustainable energy solutions. As governments and industries intensify their efforts to achieve carbon-neutral goals, the clean energy sector is expected to see continued growth, spurring further demand for REEs. This market segment is projected to grow at a CAGR of 6.50% from 2025 to 2030, making it one of the fastest-growing applications for REEs.

Geopolitical Tensions and Supply Chain Resilience

Geopolitical factors are playing a crucial role in reshaping the rare earth elements market. With China controlling a dominant share of global REE production, many countries are seeking to reduce their dependency on Chinese exports. North America and Europe, in particular, are investing heavily in the development of domestic REE mining and processing capacities. These efforts are aimed at diversifying supply chains and ensuring the availability of critical materials for industries such as defense, electronics, and clean energy. The U.S. has already committed significant funding to boost its domestic REE capabilities, including investments by the Department of Defense to secure a reliable supply of REEs for military applications.

Recycling and Sustainable Supply Solutions

Recycling rare earth elements is becoming increasingly important as a sustainable supply source. As the demand for these materials grows, recycling technologies are evolving to extract REEs from used products like magnets, batteries, and electronics. This innovation in recycling is helping to reduce the pressure on primary mining and mitigate environmental impacts. Companies and governments alike are recognizing the importance of recycling REEs to ensure a steady supply of these materials without compromising the environment. These advancements are expected to play a crucial role in meeting long-term market demand.

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Market Segmentation

The Rare Earth Elements market is segmented based on product type, element, application, end-use industry, and geography.

By Product Type:


Light Rare Earth Elements (LREEs): Comprising the majority of the market share, LREEs are essential for various industrial applications. They are projected to grow at a CAGR of 5.98% from 2025 to 2030.

Heavy Rare Earth Elements (HREEs): These elements, although representing a smaller portion of the market, are critical in specialized applications, such as high-performance magnets and advanced defense technologies. They are expected to see steady demand and moderate growth.

By Element:

Cerium: Leading with a market share of 40% in 2024, cerium plays a key role in catalysts, polishing, and glass manufacturing. The demand for cerium is expected to remain robust due to its widespread use in various industries.

Neodymium: As one of the most crucial REEs for high-performance magnets, neodymium is set to experience significant demand growth, particularly in the automotive and renewable energy sectors. This segment is forecast to grow at a CAGR of 9.20% through 2030.

By Application:

Magnets: Magnets are expected to continue holding the largest share of the REE market. This segment is particularly driven by the growing adoption of electric vehicles, renewable energy systems, and electronics. The demand for high-performance magnets is forecasted to grow at a CAGR of 8.02% from 2025 to 2030.

Catalysts and Ceramics: These applications are also integral to industries such as petroleum refining, automotive, and electronics. The catalysts segment plays a particularly important role in the development of cleaner technologies, while ceramics are essential for electronic components.

By End-Use Industry:

Clean Energy: Representing 35% of the market share in 2024, the clean energy industry is poised for significant expansion. With growing investments in wind energy, solar power, and other sustainable technologies, the clean energy sector is a key driver of demand for rare earth elements.

Consumer Electronics: The electronics industry is another significant consumer of REEs, particularly in the production of smartphones, laptops, and other high-tech devices. Demand for these materials is expected to remain steady due to the continued growth of the global electronics market.

Defense: The defense industry requires a steady supply of REEs for various applications, including missiles, radars, and military vehicles. Geopolitical tensions are likely to fuel increased demand for REEs in defense technologies.

By Geography:

Asia-Pacific: Dominating global output with 86% of production in 2024, the Asia-Pacific region is expected to continue its leadership in the REE market. China remains the largest producer and exporter of REEs in the world.

North America and Europe: Both regions are making substantial efforts to reduce reliance on Chinese exports. With the U.S. and European Union investing in domestic production and supply chain diversification, these markets are expected to see strong growth over the next few years.

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Key Players

Several key players are shaping the global rare earth elements market:

Iluka Resources Limited: An Australian company, Iluka Resources is a major player in the exploration and mining of rare earth elements. It has significant operations in the Asia-Pacific region, which are vital to meeting the global demand for REEs.

Lynas Rare Earths Ltd: A leader in rare earths production outside of China, Lynas is known for its processing facilities in Malaysia and its expanding presence in the global supply chain. The company is a key supplier to industries such as clean energy, electronics, and defense.

MP Materials: Based in the U.S., MP Materials is the largest producer of rare earth materials in the Western Hemisphere. The company plays a crucial role in supplying REEs to the U.S. Department of Defense and other critical industries.

Shenghe Resources Holding Co., Ltd.: A Chinese company, Shenghe is one of the largest processors of rare earth elements globally. Its extensive operations across the entire REE value chain give it a significant influence in the market.

Northern Rare Earth: A Chinese company focused on the mining and processing of heavy rare earths, Northern Rare Earth is one of the key suppliers to global industries, particularly in advanced technologies.

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Conclusion

The rare earth elements market is on a clear path toward growth, driven by increasing demand from electric vehicles, clean energy technologies, and consumer electronics. As industries across the globe continue to push for sustainability and energy efficiency, the role of REEs in enabling these technologies becomes ever more critical. The market is witnessing significant efforts from North America and Europe to diversify supply chains and reduce dependence on China, while innovations in recycling technologies are helping create a more sustainable supply of these materials. As the demand for rare earth elements rises, companies in the sector are positioned to benefit from long-term growth and strategic investments in production and processing capabilities.

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