This unit for the i-DCD drive motor, the world’s first electric motor for hybrid cars that uses no heavy rare earth metals, jointly developed by Honda Motor Co. and Daido Steel Co. was shown back in 2016. (Reuters)
Tesla’s ambition to remove rare earths from future models has producers in the sector reeling, but it also should spur global efforts to deliver alternatives for electric car motors that currently rely on the materials.
Model 3 and Model Y powertrains have already reduced consumption of heavy rare earths by a quarter, and Tesla’s next drive unit includes a permanent magnet motor that doesn’t use any of the materials, Colin Campbell, vice president of powertrain engineering, said during the company’s investor day early this month.
The automaker is looking to keep driving down costs, avoid processes with environmental and health risks and reduce reliance on commodities that can be most susceptible to wild price swings.
Rare earths — which are used in magnets in everything from phones to wind turbines and fighter aircraft — have long been a pain point for automakers and the clean-energy sector, because of unpredictable prices and China’s tight grip on the supply chain. China accounts for around two-thirds of mining and 85% of refining of the materials.
The risks of reliance on Beijing were highlighted in 2010, when prices spiked on China’s decision to slash exports, and in 2019 and 2020 amid speculation that shipments could be limited again amid trade tensions with the U.S.
Others carmakers including Honda, BMW, Toyota and General Motors also have sought to reduce reliance on rare earths.
A man works at the site of a rare earth metals mine at Nancheng county, Jiangxi province, China (Reuters, 2010).
Shares of producers including JL Mag Rare-Earth Co. and Jiangsu Huahong Technology Stock Co. immediately sold off after Campbell’s comments, while Lynas Rare Earths Ltd. — the biggest producer of the materials outside China — is down about a quarter this month.
The lack of diversity in rare earth permanent magnet supply chains is “a key concern for the industry within the geopolitics of critical materials,” said Nils Backeberg, founder at London-based consultancy Project Blue. “Use of cheaper — though less performance- and efficiency-focused — technologies is likely to become more widespread.”
One potential alternative could be ferrite magnets, made of iron and mixed with…
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