Europe's energy transition rests on solar, wind and batteries, yet the supply-chain conversation usually stops at the first supplier: where a module was assembled or where the cell was built. Alternatively, it jumps straight to the raw-material layer, with an overfocus on mining at the expense of refining. Prewave's recent report, Magnetic West, is a warning about systemic concentration in key industries and about why dependence on China requires live visibility and long-term planning.
Using Tier-n network analysis across 169 major European companies in automotive, chemicals, energy, advanced manufacturing and defence, Magnetic West measures exposure to major Chinese players in the permanent-magnet supply chain. At Tier-1, only 0.6 percent of those companies showed a direct link. The dependency deepened at every step: 17 percent at Tier-2, 61 percent at Tier-3, 78 percent at Tier-4 and 81 percent at Tier-5. The diversification visible at the surface was, in large part, an illusion. Exposure was real, but it lived several tiers upstream, beyond the line of sight of most procurement teams.
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The report's deeper point matters more for solar and storage than the magnet numbers themselves. The bottleneck was never the raw material. Rare earths are not geologically rare; the constraint is the capability to process them, the separation and refining chemistry that the West largely abandoned as too costly and too dirty, and that China built into an industrial base over decades. Prewave's data put Chinese refining at roughly 90 percent of the global total and magnet manufacturing at around 85 to 90 percent. Concentration of that kind is not a sourcing inconvenience; it is a systemic dependency.
Why this matters for solar and storage
Two findings from the report move directly into any clean-energy supply chain.
First, China has shown it will act as a gatekeeper rather than merely a supplier. Its October 2025 export-control regime asserted authority over products made with Chinese material or technology, anywhere in the world. A dominant position in processing becomes leverage the moment the holder chooses to use it.
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Second, geography alone does not solve the problem. The report's analysis of the so-called Vietnam loophole found that relocating downstream production without relocating the upstream processing does not create an independent supply chain; it simply creates a new address for the existing one. A module line or a cell plant moved out of China is not the same thing as a supply chain moved out of China.
The same questions, for solar and storage
Solar modules and battery cells are not constructed from permanent magnets, but they are critical-materials industries shaped by the same geography of processing, and they sit alongside magnets in the same strategic basket: the technologies on which Europe's energy and industrial ambitions depend. For wind, the connection is literal, since turbine generators are among the largest magnet applications, so the report's findings already reach that part of the renewables sector. For solar and storage, the lesson is structural.
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The question Magnetic West answered for magnets is the one every module buyer and every storage developer should now ask of their own chains: how much of my apparent diversification survives past Tier-1? That question cannot be settled by reading invoices or country-of-assembly labels. It requires mapping supplier relationships several tiers deep, which is precisely what turns an invisible Tier-2 or Tier-3 dependency into something a procurement leader can act on. Visibility that stops at the first supplier produces a comforting picture of breadth. The deeper map tends to produce a less comfortable one, and a more accurate one.
Near-term priorities
The report is candid that full decoupling from China is not a realistic objective this decade, even for magnets, where a non-Chinese ecosystem is finally emerging but remains fragmented and undersized relative to demand. The same realism should govern expectations in solar and storage. The near-term task is not to wait for an independent supply chain to appear; it is to reduce exposure before the market tightens.
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In practice, that means a consistent set of moves: mapping dependencies several tiers deep; qualifying credible non-Chinese suppliers early, rather than at the point of crisis; engaging now with the processing and manufacturing capacity expected to come online between 2027 and 2030; and treating strategic inputs as an exposure to be managed rather than a commodity to be bought on price.
The core finding of Magnetic West is blunt: most European manufacturers are less diversified than they believe. At Tier-1, the supply base looks broad and increasingly local. At Tier-2 and below, it narrows to a concentrated, China-linked core. There is no reason to assume solar and storage are exceptions. Until that deeper picture is mapped, the reassuring view at the surface is not the one to plan around. (Sarah Naber / Thomas George, hcn)
