MP Materials Shares Surge on Major Electric Vehicle Supply Agreement

Shares of MP Materials advanced approximately 3.4% to $60.17 following reports of a significant new long-term supply arrangement with a prominent electric vehicle manufacturer. This development marks another positive turn for the rare earth elements producer, which is coming off a record-breaking year that saw its stock appreciate more than 260% in 2025.

Strategic Expansion and Institutional Confidence

The company’s latest strategic move involves a multi-year contract to supply neodymium-praseodymium (NdPr) magnets from its expanding U.S. production facilities. While the specific automotive partner remains undisclosed, this agreement reinforces MP Materials’ comprehensive strategy to control the entire supply chain from mining to magnet manufacturing within North America.

Concurrent with this news, institutional investors are demonstrating increased confidence. Groupama Asset Management acquired approximately 600,000 shares valued at around $20 million, signaling strong belief in the company’s long-term growth trajectory.

A contrasting note emerged as CEO James Litinsky disposed of 248,411 shares on November 20 for approximately $15.86 million. Market analysts generally interpret this transaction as routine portfolio rebalancing following the substantial share price appreciation.

Should investors sell immediately? Or is it worth buying MP Materials?

Transformational Government Support

The year 2025 proved transformative for MP Materials, highlighted by a landmark $550 million defense package secured in July. The Department of Defense arrangement included $400 million in equity financing complemented by a $150 million loan facility. Crucially, the package guarantees a minimum price of $110 per kilogram for NdPr, providing significant protection against the volatile pricing typical of commodity markets.

Additional milestones achieved throughout the year include:
– Establishment of a joint venture with Ma’aden to develop a refinery in Saudi Arabia (November)
– Third-quarter revenue of $53.55 million, exceeding analyst expectations
– Ongoing development of the Independence magnet manufacturing facility in Texas

Favorable Market Outlook

BMO Capital Markets recently upgraded MP Materials to an “Outperform” rating, characterizing the substantial government backing as “transformational” for the company’s prospects. The consensus price target among analysts sits between $78 and $79, suggesting potential upside of approximately 30% from current trading levels.

The $60 price level now represents a key psychological support threshold. Market observers suggest that forthcoming specifics regarding the electric vehicle supply contract could serve as the next catalyst propelling the stock beyond its current trading range.