The head of Scout Motors said the upstart automaker is engineering some components to reduce the need for rare earth materials, an issue that has become critical to the car industry and taken center stage in U.S. trade negotiations with China.

The Volkswagen AG-backed company, which plans to produce electric and hybrid vehicles, is exploring adjustments to brakes and drive units, Scout chief executive officer Scott Keogh told Bloomberg TV in an interview June 17.

“We’re going to use less rare earths,” he said. “It can be done, and that’s how we’re engineering the vehicle.”

Rare earths have emerged as a key issue in U.S.-China trade talks in recent weeks. The coveted raw materials are widely used in manufacturing of cars, iPhones and other products, and China has used its dominance to exert leverage in negotiations.

Automakers have expressed concern about the availability of rare earths. Ford Motor Co. CEO Jim Farley told Bloomberg last week that supplies remain “day-to-day” despite apparent progress in U.S. talks with China. The company briefly shut down a factory in Chicago for a week last month due to a shortage of the materials.

Scout is monitoring the situation as it builds out its South Carolina production facility. The revived brand is expected to offer the Traveler SUV and Terra pickup starting in 2027.

“We can see transparently it’s an issue and we can navigate it,” Keogh said.