The global rare earth elements market size was USD 3.39 billion in 2023 and is projected to grow from USD 3.74 billion in 2024 to USD 8.14 billion by 2032, exhibiting a CAGR of 10.2% during the forecast period. The growing demand for consumer electronics such as smartphones, laptops, and tablets is a key factor driving the consumption of rare earth elements. In developing economies, market growth is expected to accelerate due to rapid industrialization, expanding construction activities, and government-led digitization initiatives. Additionally, the rising adoption of electric vehicles (EVs) in countries such as Germany, the U.S., and the U.K. is anticipated to further boost the consumption of rare earth minerals. Strict regulations on carbon emissions and growing environmental concerns have also encouraged the development of renewable energy sources, thereby increasing the use of these elements. However, factors such as the high cost of rare earth minerals and the strong market dominance of China-based manufacturers are likely to restrain market growth.

Fortune Business Insights™ provides this information in its research report, titled “Rare Earth Elements Market, 2025-2032”.

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Segmentation Analysis:

By Type Analysis:

Based on type, the market is categorized into lanthanum, cerium, neodymium, praseodymium, samarium, europium, and others. The neodymium segment dominated the market in 2023, driven by its extensive use in electric and hybrid vehicles. Neodymium-based permanent magnets are key components in EV batteries and motors, supporting the segment’s strong growth. The cerium segment is expected to expand steadily, fueled by rising demand from the automotive sector. Cerium is widely utilized in catalytic converters and exhaust systems to reduce harmful emissions, thereby enhancing vehicle performance and environmental compliance.

By Application Analysis:

Based on application, the market is segmented into magnets, metallurgy, batteries, polishing, glass and ceramics, catalysts, phosphors, and others. The magnets segment accounted for the largest share of the rare earth elements market in 2023. This dominance is attributed to high demand from manufacturers of servo motors, hard drives, sensors, speakers, and other electronic devices. The batteries segment is projected to register the fastest CAGR over the forecast period, propelled by increasing adoption of electric and hybrid vehicles and advancements in energy storage technologies. The shift toward low-emission mobility solutions continues to drive the demand for rare earth-based battery materials.

Drivers & Restraints:

Drivers:

• Rising Demand for Neodymium Magnets in EV Production: The increasing adoption of electric and hybrid vehicles is fueling the demand for neodymium-based permanent magnets, which are essential for EV motors and batteries. This surge in EV manufacturing is a key factor propelling market growth.
• Expanding Use in Automotive Catalytic Converters: The rising demand for cerium, driven by its application in automotive exhaust systems and catalytic converters to reduce emissions, is supporting market expansion.
• Growing Applications Across Electronics and Energy Storage: The rising usage of rare earth magnets in consumer electronics such as smartphones, sensors, and audio devices, coupled with the growing demand for rare earth-based batteries in energy storage systems, further contributes to market growth.

Restraints:

• Supply Chain Instability and Price Fluctuations: Dependence on limited mining regions and fluctuating prices of rare earth elements may hinder market stability and profitability.
• Environmental Concerns Related to Mining: The extraction and processing of rare earth elements pose environmental challenges, such as radioactive waste and water contamination, which may limit production activities and regulatory approvals.

Regional Insights:

Surging Industrialization and Construction Activities to Favor Growth in Asia Pacific

Geographically, Asia Pacific earned USD 2,220.8 million in 2020 in terms of revenue and is likely to retain its leading position in the near future. This growth is attributable to the surging building & construction activities in China. The country is considered to be a major growth contributor on account of the rapid industrialization and the presence of numerous consumer electronics manufacturers. On the other hand, North America is anticipated to grow considerably backed by the increasing production of EVs in the U.S., which, in turn, would accelerate the demand for these earth elements.