LONDON/BERLIN, Nov 14 The auto industry’s drive to make electric vehicle engines with little or no rare earth content has reached fever pitch, with European, U.S. and Japanese automakers and suppliers racing to find alternatives in a domain dominated by China.
Automakers have primarily relied on motors with rare-earth permanent magnets, which have proven to be the most effective in providing the torque needed for electric vehicles.
But different types of motors without permanent magnets, which were previously too large and too inefficient, or those with significantly reduced rare earth content, have become commercially viable, sparking a rush for alternatives.
Market leader Tesla (TSLA.O) made headlines earlier this year by saying it would remove rare earths from its next-generation electric vehicles.
But automakers from General Motors (GM.N) to Jaguar Land Rover (JLR) and major suppliers like BorgWarner (BWA.N) are seeking or have developed engines with low or no rare earth content, such as engines external without magnet. excited synchronous machines (EESM), which generate a magnetic field using electric current.
Others, like Nissan (7201.T), are going further than expected, with a dual strategy to develop both newer EESM motors and also permanent magnet motors in which the rare earth content will be phased out. .
China dominates the mining and processing of a group of 17 metals known as rare earths, although companies elsewhere are trying to loosen China’s grip.
Recent Chinese restrictions on exports of gallium and graphite – essential for the production of electric vehicles – have highlighted the risk of over-reliance on China.
German supplier ZF (ZFF.UL) has developed an EESM motor which, according to chief technology officer Otmar Scharrer, matches the size and performance of permanent magnet motors.
“This is an important contribution to making us a little more independent from China,” he said.
ZF is in talks with U.S., European and Chinese automakers to supply the engine and could produce electric models within two years, Scharrer said.
In addition to overreliance on China, the refining of rare earths, such as neodymium and dysprosium, involves toxic solvents and waste that conflict with sustainable development goals.
“If you do it right, you get a much more sustainable product,” Ben Chiswick, director of engineering business development at Detroit-based Drive System Design, which is developing rare earth-free motors with three automakers.
Some automakers, like BMW (BMWG.DE), claim to have already achieved this after years of research.
“It wasn’t a home run… but it works very well without rare earths,” said Uwe Deuke, the engineer responsible for developing BMW’s EESM motor for its next-generation electric vehicles.
“WAIT IN THE WINGS”
The average EV permanent magnet motor uses approximately 600 grams (1.32 lb) of heavy rare earth neodymium. Neodymium prices have fluctuated widely: at around $125/kg currently, they are down from last year’s high of around $223, but well above $65 in 2020.
Vitesco (VTSCn.DE) designed an EESM engine for Renault (RENA.PA) and is offering a new version in 2026. Gerd Roesel, head of innovation at the German supplier’s electrification division, said alternatives without rare earths avoid these strong price fluctuations.
Others, like the American startup Niron Magnetics, are developing permanent magnets without rare earths.
Tesla’s announcement about moving away from rare earths “opened buyers’ eyes to the fact that you don’t really need rare earths to make magnets for electric vehicles,” said Jonathan Rowntree, CEO of Niron .
Niron’s latest funding round included investments from GM and Stellantis (STLAM.MI).
Nissan uses an EESM engine in its Ariya crossover. Shunji Oki, chief expert of the automaker’s powertrain and electric vehicle engineering division, said Nissan was developing both better EESM motors and permanent magnets in which rare earths would be phased out.
James Edmondson, an analyst at IDTechEx, said automakers rushed to find alternatives as rare earth prices rose, but now prices have fallen, they are watching China closely and waiting to see if governments take steps that would limit the use of Chinese rare earths, as the U.S. Inflation Reduction Act did.
“That’s why they (automakers) have other technologies waiting in the wings,” he said.
IDTechEx predicts that at present, rare earth permanent magnet motors will lose some of their global market share over the next decade, but will still account for more than 70% as Chinese electric vehicle manufacturers are under no pressure to reduce their use – although their share will be much closer to 50% in Europe, Edmondson said.
And where Western automakers stick to rare-earth permanent magnets, they are working to significantly reduce their content, he added.
Mercedes-Benz’s (MBGn.DE) next-generation EV platform, for example, contains almost no rare earths.
The challenge also goes beyond engines.
In some electric vehicles, about a third of the rare earths used are in the audio system speakers. British company Warwick Acoustics has developed rare earth-free speakers that are 90% lighter and more energy efficient than conventional speakers. It signed its first luxury automaker client and is in discussions with others, CEO Mike Grant said.
“We’re fighting people right now,” he said.
