Rare Earth Elements Market Size, Share, and Growth Forecast for 2025 - 2032

Rare Earth Elements Market Size and Trends

The global rare earth elements market is set to expand at a CAGR of 10.6% between 2025 and 2032. It will likely rise from US$ 7.2 Bn in 2025 to US$ 14.7 Bn by 2032.

Rare earth elements (REEs) are extensively used in making permanent magnets, which are widely used in the manufacturing of electric motors for electric vehicles, wind power, and several other areas. Magnets are set to be the fastest-growing application area for rare earth elements globally.

Demand for neodymium magnets has been soaring primarily due to the shift toward new energy vehicles such as Battery Electric Vehicles (BEVs), Fuel Cell Electric Vehicles (FCEVs), and Plug-in Hybrid Electric Vehicle (PHEVs) from Internal Combustion Engine (ICE) vehicles. Also, rising inclination toward sustainable energy sources is estimated to spur demand.  

Key Highlights of the Rare Earth Elements Industry

• In 2025, Light Rare Earth Elements (LREEs) are likely to hold the highest share and are projected to be valued at around US$ 12 Bn by 2032. It is owing to high demand from traditional applications such as magnets, catalysts, and metallurgy as well as from frontier-tech and clean energy technologies.
• In 2024, Asia Pacific dominated the demand for rare earth elements, led by China which accounts for more than 70% of the global demand.
• China is the largest supplier and consumer of rare earth magnets, followed by Japan in Asia Pacific.  China is set to maintain its 50% share in global New Energy Vehicle (NEV) sales by 2032, wherein rare earth-based permanent magnet electric motors are a critical component.    
• As the government across the globe plans to tackle climate change and net-zero emissions, there is a greater emphasis on securing China-less supply chains.
• Western governments are focusing on collaborations and technology funding to reduce reliance on China. New projects have advanced, especially in Australia, South America, and Africa.
• China has hegemony over the global rare earth supply with state-backed companies holding strong positions through the global supply chains.
• With demand outpacing supply, the prices of rare earth elements are anticipated to surge over the coming years, especially the likes of neodymium, praseodymium, dysprosium, and terbium.   
• The global rare earth elements industry is monopolized by China-based companies. The country has started consolidating its state-owned enterprises to be wary of competition from companies outside China.
• A few of the China-based companies have started developing strategic collaborations with mining companies from Africa and Southeast Asia to take their business operations global.

Global Market Attributes	Key Insights
Rare Earth Elements Market Size (2025E)	US$ 7.2 Bn
Market Value Forecast (2032F)	US$ 14.7 Bn
Projected Growth (CAGR 2025 to 2032)	10.6%
Historical Market Growth (CAGR 2019 to 2024)	10.2%

Historical Growth and Course Ahead

Price Volatility Hit Rare Earth Elements Projects Globally during the Historical Period

The global rare earth elements market was valued at US$ 4.0 Bn in 2019, experiencing substantial growth at a CAGR of 10.2% through 2024. Demand peaked between 2020 and 2024, largely driven by increased demand from new electric vehicles and other high-tech products. China reaped significant benefits from this trend during this post-pandemic wave.

• China's dominance in the REE supply chain (accounting for over 70% of global production) and its use of REEs as a strategic resource has raised supply concerns for nations like the U.S. and EU.

Geopolitical factors also played a significant role in price fluctuations of REEs. Efforts to diversify supply chains and secure sustainable sources, such as partnerships with Australia, emerged but remained limited in terms of impact. Price volatility had potentially deterred investment in rare earth element projects, as China-based manufacturers remained the most cost-efficient worldwide.   

Increasing Popularity of Electric and Hybrid Vehicles to Fuel Future Growth

The rare earth elements industry is poised to experience steady growth from 2025 to 2032, with a projected CAGR of 10.6%. The popularity of electric and hybrid vehicles in developed regions, fueled by environmental concerns and high per capita expenditure, will likely sustain demand for rare earth metals in vehicle production.

• The average hybrid or Electric Vehicle (EV) uses between 2 kg and 5 kg of rare earth magnets, depending on the design. Neodymium magnets in a typical EV weigh up to 3 kg.

The emerging applications of REE in the clean energy sector are also expected to create lucrative growth prospects for the market in the coming years.

Market Dynamics

Growth Drivers

Vehicle Electrification Revolution to Drive Demand for Rare Earth Elements

The global Electric Vehicle (EV) market is on the rise, translating to a high demand for materials that are used in their manufacturing. Rare earth elements are widely used in EV motors.

In the next few years, 80% of all EVs are projected to use Permanent Magnet Synchronous Motors (PMSMs). Automotive OEMs are planning on massive jumps in EV production and are looking for sustainable partners to fulfill their demand for these motors. For example,

• In 2024, BMW and Yamaha Motors invested in Phoenix Tailings, a U.S.-based start-up specializing in rare earth elements processing. This investment by the automotive manufacturers is expected to boost the production of strategic metals outside of China.

With the rising EV infrastructure across both developed and developing countries, as well as increasing initiatives and push from the government sector, the EV market continues to experience a flourishing outlook worldwide. The automotive industry’s decarbonization goal further uplifts this demand surge.

• In 2024, about 17.1 million units of electric cars were sold in the global EV market, representing a massive 25% leap from the sales recorded in 2023. It is projected to reach 45 million units by 2030 as per the International Energy Agency (IEA).

The global rare earth elements industry is hence projected to thrive with the evolution of the EV industry.

Growth of Clean Energy Technologies such as Wind Power Generation to Support the Market

Rare earth elements are crucial for advancing clean energy technologies such as wind turbines, electric vehicles, and solar panels. The efficiency improvements in wind turbines, enabled by permanent magnets, are expected to fuel a CAGR of over 50% in wind turbine installations. The clean energy technologies sector is anticipated to increase demand for rare earth elements considerably, as strong magnets are important in the construction of direct-drive wind turbines.

• By 2030, the cumulative energy capacity is forecast to reach 228 GW, showcasing the significant impact of rare earth elements on expanding sustainable energy solutions, thereby influencing the future of global energy sustainability.

Neodymium, dysprosium, praseodymium, and terbium are vital for creating powerful permanent magnets for usage in wind turbine generators. For instance,

• A single wind turbine may require 1 to 2 tons of Neodymium-Iron-Boron magnets per megawatt due to their exceptional strength and capability of exerting forces up to 1000 times their weight. This drives up demand for rare earth elements.

Market Restraining Factors

Price Unpredictability Remains the Dominant Factor in the Market, Affecting Profitability

The price dynamics of rare earth elements between 2019 and 2023 reflect diverse market influences driven by global demand, supply constraints, and geopolitical factors. While prices of light REEs like lanthanum and cerium dropped due to oversupply and limited demand for their traditional applications, the value of critical heavy REEs like terbium surged significantly, up by 76.3%. It is due to their indispensable role in green technologies like wind turbines and electric vehicles.

• Increasing demand for neodymium and praseodymium, which saw price hikes of 15.5% and 17.1%, respectively, is closely tied to their use in high-performance magnets required for EV motors and renewable energy systems.

Yttrium's 50% price hike aligns with its rising demand across high-tech applications like lasers and superconductors. Terbium's steep rise highlights its limited availability and high demand for phosphors and advanced magnet technologies.

Market Opportunities

Recycling has Become a Critical Route to Maintain Steady Sourcing

Currently, only 1% of the total REE is recovered through end-products such as magnets, batteries, catalysts, and fluorescent lamps. Considering the importance of these strategic minerals to modern technologies and sustainable energy sources, several companies have started investing in recycling rare earth elements. For instance,

• In 2025, InMotion Ventures, the investment arm of Jaguar Land Rover (JLR), invested US$ 2 Mn in Cyclic Materials, a REE recycling company that focuses on creating a circular supply chain. Cyclic Materials is also backed by Microsoft, Hitachi, BMWi, ArcTern, and Fifth Wall.

Rare earth is usually mixed with other elements, thereby making the recycling process complex and economically challenging. However, recycling or reusing REEs can contribute to ethical sourcing and conflict-free value chains. For instance,

• One of the studies predicts that the recycling of hard disk drives in the U.S. can potentially meet up to 5% of the global demand for neodymium excluding China.

These advancements in recycling technologies offer a sustainable solution to alleviate the dependence on traditional mining and contribute to meeting the high demand for rare earth metals.

Rare Earth Elements Market Insights and Trends

Product Type Insights

Light Earth Elements like Neodymium Continue to Gain Traction in Permanent Magnets Production

In 2025, the global light rare earth elements market is anticipated to reach a value of around US$ 6.0 Bn, with a CAGR of 11% expected till 2032. In value terms, neodymium and praseodymium hold paramount importance in the rare earth elements industry, particularly for their indispensable role in manufacturing permanent magnets, a critical cog across sectors such as green technologies, industrial applications, consumer electronics, and robotics.

Neodymium, on the other hand, stands out as a cornerstone element in rare earth minerals due to its pivotal contribution to high-performance magnets. One of the neodymium's attributes is its high melting point, making it well-suited for applications involving elevated temperatures like electric motors.

• In 2025, Australia’s National Reconstruction Fund Corporation (NRFC) invested AUD 200 Mn in Arafura Rare Earths’ ‘Nolans Project.’ The Nolans Project will produce neodymium and praseodymium (NdPr) that may fulfill around 4% of the world’s demand from 2032.

Lanthanum to be the Second-most Abundant REE

The global market for lanthanum is estimated to reach a value of US$ 140 Mn in 2025, with a projected growth rate of 8.6% by 2032. Lanthanum finds extensive use in nickel metal hydride rechargeable batteries, where it constitutes a significant portion of the negative electrode as lanthanum hydride.

• Toyota Prius Hybrid car incorporates around 4 to 5 kg of lanthanum in its Nickel-lanthanum hydride batteries, which are twice as efficient as standard lead-acid batteries.

Lanthanum also plays a crucial role in glass and ceramic manufacturing by improving the alkali resistance of glass. It is also being utilized in specialized optical glasses like infrared-absorbing glass.

Application Insights

Search for Permanent Magnets and Catalysts from Green Technology Providers Continues to Support Growth 

In 2025, permanent magnets are set to capture around 80% of the global requirements of rare earth elements. Rare earth metal-based magnets such as neodymium-praseodymium (NdPr) and samarium cobalt (SmCo) have become essential building blocks for sectors such as automotive, HVAC, robotics, green energy technologies, and consumer electronics.

Neodymium is crucial for making powerful magnets used in mobile phones, medical equipment, electric cars, wind turbines, and hard drives. Praseodymium, on the other hand, is essential for aircraft engines and studio lighting.

Traditionally, the NdPr magnets market is primarily taken up by electronic goods, e-bikes, and other automotive moving components. However, with the rise in EV sales and shift toward sustainable energy pockets, demand for Nd and Pr is likely to exhibit a substantial rise.

The luminescent properties of yttrium, terbium, and europium enhance fluorescent tubes, LED lights, and LCD screens in smartphones and TVs. Lanthanum is key for digital camera lenses and hybrid vehicle batteries.

Rare earth elements such as lanthanum and cerium are widely used as catalysts in automotive and petrochemical sectors. La and Ce are used as catalysts in petrochemical refining, automobile emission catalytic controllers, industrial waste gas purification, fossil fuel catalytic combustion, and solid oxide fuel cells. Rare earth oxides are also used significantly in metallurgy, ceramics, batteries, and polishing powders.

Regional Insights and Trends

Asia Pacific Rare Earth Elements Market

China’s Leadership in Asia Pacific to be Strengthened by Processing and Mining Innovations

Asia Pacific has been the largest consumer of rare earth elements globally, accounting for more than 90% of the global demand. China currently accounts for approximately 70% of the world's rare earth elements production and processes close to 85%, as well as controls around 90% of the permanent magnet production, effectively granting it a monopoly in the market.

To maintain this dominant position, China has imposed a ban on the export of processing technology. Furthermore, the country is investing in technological developments in the mining sector to support its value chain.

• As per a study published in the Chinese Academy of Sciences (CAS), China has developed a revolutionary technology based on electric fields that may manage to recover 95% of rare earth as against 15% of conventional leaching techniques. This technology will reduce mining time by 70% and lower electricity consumption by 60%.

Japan and India are also among the key contributors to the rare earth elements industry in Asia Pacific. India’s IREL Limited and Japan’s Toyota Tsusho Corporation through their joint venture operate a separation and refining facility in Andra Pradesh, India. This partnership may open a plethora of opportunities in terms of technological investments and best practices.   

Europe Rare Earth Elements Market

Europe’s High Demand for Rare Earths is Encouraging Domestic Resource Development

Europe is one of the largest importers of Rare Earth Elements (REEs) globally, with the region importing more than 98% of its REEs from China. Although the region is rich in rare earth oxide deposits, manufacturing companies cannot compete commercially with the likes of China owing to higher energy costs and technological challenges.

Despite the region's security significance, governments and private companies in Europe have struggled to escape China’s orbit of rare earths. Germany, France, and the U.K. are the region’s largest markets for rare earth elements accounting for over half of the demand, primarily targeting catalysts, metallurgy, and magnets.

Other countries in Europe such as Sweden, Finland, Norway, and Spain are also planning to invest in the rare earth value chain to reduce the reliability of heavy rare earth elements on imports. For instance,

• In 2025, Sweden's LKAB, a state-owned iron ore producer, announced the start of a new rare earth oxides project in Lulea, Sweden with an initial investment of US$ 73 Mn. The facility is expected to be operational by 2026 and may meet up to 18% of Europe’s rare earth elements demand, thereby securing a supply of critical raw materials that are essential for green technologies.

North America Rare Earth Elements Market

Demand to Take Off in North America with Booming Military and Defense Manufacturing Activities in the U.S.

By 2032, the North America rare earth elements market is estimated to be valued at US$ 300 Mn with a robust CAGR anticipated between 2025 and 2032. Both the U.S. and Canada have large rare earth reserves and resources. However, the complex separation and refining process poses substantial economic challenges for them.

In the U.S., MP Materials owns the sole rare earth elements mine, accounting for approximately 2.3 million metric tons of proven reserves. However, despite this significant reserve base, the U.S. heavily relies on imports for REEs, with nearly 78% sourced from China. For example,

• In 2023 alone, imports of REEs into the U.S. amounted to about US$ 200 Mn, driven primarily by the rising consumer demand for electronics and EVs.

Demand for REEs is also set to be propelled by the renewable energy and defense sectors, utilizing these elements to advance their technologies.

• Every F-35 stealth fighter aircraft manufactured by Lockheed Martin in the U.S. roughly uses 400 Kg of REE in their electronic warfare systems.

With the growing orders for this advanced fighter jet from across the world, demand for rare earth elements will likely flourish in the defense sector of the country.

Rare Earth Elements Market Competitive Landscape

The global rare earth elements industry is largely dominated by China-based firms, prompting top players to innovate new extraction techniques with reduced carbon footprints. These initiatives aim to mitigate environmental impact and address sustainability concerns associated with rare earth element extraction. Manufacturers are also exploring environmentally sustainable recycling methods to minimize waste and reliance on virgin materials, thereby promoting circular economy principles. For example,

• Noveon Magnetics in San Marcos, Texas, is a pioneer in producing recycled neodymium magnets without the need for rare earth extraction. This approach achieves over 99% recycling, cutting energy use by approximately 90%, and reducing carbon dioxide emissions by half compared to traditional manufacturing methods.

Key Industry Developments

• In 2024, Brazilian miner Serra Verde Group started commercial production of rare earth oxides, and it is expected to produce 5,000 tons by 2026 to double the production output by 2030.
• In 2024, Trafalgar, an India-based engineering and procurement firm, announced plans to build India's first rare earth metals, alloy, and magnet plant. The goal is to cater to 20% of India’s sintered NdFeB magnets demand by 2027.

Rare Earth Elements Market Report Scope

Report Attributes	Details
Historical Data/Actuals	2019 - 2024
Forecast Period	2025 - 2032
Market Analysis Units	Value: US$ Bn/Mn, Volume: As applicable
Geographical Coverage	North America Europe East Asia South Asia and Oceania Middle East and Africa Latin America
Segmental Coverage	Product Type Application Sector Region
Competitive Analysis	China Rare Earth Holding Ltd Jiangxi Copper Co. Ltd China Minmetals Rare Earth Co. Ltd Xiamen Tungsten Co. Ltd Guangdong Rare Earth Industry Grp Co Ltd Grinm Advanced Materials Co Ltd MP Materials Lynas Rare Earth Ltd Shenghe Resources holding Co. Ltd IREL Ltd
Report Highlights	Market Forecast and Trends Competitive Intelligence & Share Analysis Growth Factors and Challenges Strategic Growth Initiatives Pricing Analysis & Technology Roadmap Future Opportunities and Revenue Pockets Industry Market Analysis Tools
Customization and Pricing	Available upon request

Rare Earth Elements Industry Segmentation

By Product Type

• Neodymium
• Praseodymium
• Cerium
• Dysprosium
• Lanthanum
• Europium
• Terbium
• Yttrium
• Gadolinium
• Others

By Application

• Permanent Magnet
• Catalyst
• Glass and Ceramics
• Metallurgy and Alloys
• Phosphors
• Others

By Sector

• Automotive
• Clean Energy
• Oil and Gas
• Electronics
• Healthcare
• Others

By Region

• North America
• Europe
• East Asia
• South Asia and Oceania
• Middle East and Africa
• Latin America

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