MP Materials Ships Its First Magnets to GM in Q4. This is What The Milestone Is Worth.

MP Materials (NYSE: MP) was early to the rare-earth metals story, positioning the company well as the importance of these materials became more widely understood. In fact, rare-earth metals are so important that the U.S. government even stepped in to provide the company with financing. The company's next big step is coming in the fourth quarter, when it expects to start commercial shipments of rare-earth magnets to General Motors.

MP Materials is in the right place at the right time

The big problem with rare-earth metals is that much of the world's supply comes from China. China has proven more than happy to use access to rare-earth metals as a geopolitical bargaining chip. In fact, China's threats to limit supply led automakers to warn that they may be unable to produce enough vehicles in mid-2025. The problem, however, is much bigger than the auto sector.

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Rare-earth metals go into high-tech products from cars to cellphones to missile defense systems. That last one makes access to rare-earth metals an issue governments can't ignore and helps explain why MP Materials is so well positioned. It is building a rare-earth metals business in the United States, a politically and economically stable region that will attract customers from Western nations. Of course, the company will also be well-positioned to supply its home market, including the U.S. defense industry. This is why the U.S. government is helping to fund MP Materials.

That said, MP Materials is still a start-up company. In the second quarter of 2026, it lost $0.01 per share on an adjusted basis amid heavy capital investments in its business. To be fair, that was an improvement over the $0.13 per share loss in the same quarter of 2025. Notably, revenues increased 89% year over year in the quarter. There is material progress being made here.

The next big step is already taking shape

One of the key achievements in the second quarter was MP Materials' shipment of rare-earth magnets to General Motors (NYSE: GM) for testing. Suppliers are rigorously tested before they get approved by automakers, given how important safety is in the car industry. MP Materials expects to start commercial shipments in the fourth quarter of the year.

Being included in an automaker's supply chain is a very big deal. It basically means MP Materials could have a reliable customer for years to come. GM could be the foundation on which the company builds its customer base. The GM relationship could also help the company move from a money-losing start-up to a sustainably profitable business.

To be fair, GM isn't the only customer that MP Materials is working with. For example, in the second quarter earnings release, it announced an agreement with a "new American aerospace and defense customer." The company also highlighted efforts to court drone manufacturers, stating that it had "executed subscription agreements with multiple leading U.S. and allied customers." So there is more going on here than just GM. But GM will be a very important milestone from a business development perspective.

MP Materials' next step is really a leap

It is still fairly early in MP Materials' development as a business. So agreements are great, but the company really needs to prove that it can reliably supply customers with rare-earth metals. That's the test it is about to face with GM. If MP Materials passes this test, then it will also have proven to the market that the long-term investment opportunity here is real. That's way more valuable than what it will earn from GM.

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MP Materials. The Motley Fool recommends General Motors. The Motley Fool has a disclosure policy.