For years, Western carmakers treated rare-earth metals as just another set of specialised inputs. That calculation collapsed once China began tightening export controls and using its dominance in processing neodymium, dysprosium and terbium as leverage in trade disputes. The shifts hit the auto industry at a moment when electric motors were becoming central to future lineups, exposing a vulnerability that companies could no longer ignore, the New York Times reported.
China’s dominance reshapes strategy
China’s control over mining and refining rare earths has long been known, but the recent export curbs underscored how difficult it is for manufacturers to source these materials elsewhere. Automakers in the United States and Europe now speak openly about reducing their exposure, even if that means experimenting with heavier, bulkier or more expensive alternatives. The unease is not limited to premium EV drives; even small components—wiper motors, seat adjusters, audio systems—depend on the same class of magnets.
BMW’s early shift away from rare earths
BMW is among the few major carmakers that already mass-produce motors without rare-earth magnets. The decision dates back to a price surge in neodymium more than a decade ago. Engineers in Munich concluded that relying on a single supply chain could become a long-term risk. Their motors, used in models such as the iX SUV, generate a magnetic field using electric current instead of permanent magnets. While the setup adds weight and complexity, BMW argues the architecture performs better at everyday driving speeds. Engineers say it also offers finer control over heat and magnetic output.
Start-ups chase the same target
A cluster of young firms has begun developing compact electric motors built entirely without rare-earth metals. One of them, Conifer, works from rented garages in Sunnyvale, experimenting with disc-shaped motors designed initially for two-wheelers. The company’s founders say the main obstacle is scaling production fast enough to meet interest from vehicle makers in Asia and Europe. Their candid admission is that rare-earth motors still deliver a higher power density, making the alternatives viable only if carmakers accept trade-offs in size or performance.
Searching for the next great magnet
American researchers are trying to grow substitutes in the lab. Scientists at Northeastern University have been experimenting with tetrataenite, an iron-nickel compound that naturally forms in meteorites over millions of years. The team has managed to synthesise the material in weeks, but producing industrial quantities remains a distant prospect. Even if successful, researchers say tetrataenite will not replace rare earths in every application, at least not in the near term.
A parallel effort: finding new supply
While some companies push technological workarounds, others are investing in new sources of rare earths outside China. General Motors has partnered with MP Materials, which operates a mine in California and is building a refining plant in Texas. Under a long-term agreement, GM has committed to buying most of the magnets produced there for its Cadillac and Chevrolet EVs. The move reduces reliance on China but comes with a financial risk: if global prices fall again, GM could end up paying far more than competitors.
Washington’s role in the hunt
Despite cuts to other clean-energy programmes, the U.S. Energy Department is funding research into next-generation magnets. Grants of up to $3 million are available for teams aiming to produce magnets twice as strong as today’s best rare-earth versions—a target many specialists consider optimistic. Officials argue that advances in artificial intelligence might speed discovery, though no clear timeline has been set.
A fragile window of calm
China and the United States have eased some tensions temporarily, but few in the industry expect stability to last. Analysts in Washington and Brussels warn that the question is not whether rare earths will be used as leverage again, but when. For carmakers rebuilding their electric lines around long-term certainty, that is enough to spur a search for motors that can remain on the road regardless of geopolitics.
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