[Tech Talk] Is the Electric Vehicle Battle About Batteries? ... Actually, It's a 'Magnet' Battle

Permanent Magnets Dominating 80-90% of Market by China
Key Components for Electric Vehicle Motors and Other Electric Devices
US and UK Strive to Reduce Dependence on Rare Earth Magnets

The Chinese government has triggered an alarm in the electric vehicle industry by deciding to restrict the export of manufacturing technology for the rare earth element 'Neodymium.' Neodymium is a raw material for 'Permanent Magnets (PM),' a key component of electric motors, and China dominates 80-90% of the entire market.

From electric vehicle motors to wind turbines, almost all electric devices worldwide operate with PM electric motors. Experts point out that this is a much more urgent issue than secondary batteries, which other countries can sufficiently supply through their supply chains.

The Heart of Electric Vehicles, 'Neodymium Magnets,' Market Dominated by China

Bar-type neodymium permanent magnet sold on Amazon
[Image source=Amazon]

On the 5th (local time), Japan's Yomiuri Shimbun reported that Chinese trade authorities are considering restricting the export of neodymium PM manufacturing technology. If this policy is implemented, importing technology licenses to produce neodymium PM outside China will be prohibited. In other words, neodymium PM will effectively have to rely entirely on finished products from China in the future.

According to the media, Chinese-made neodymium PM holds a market share of 80-90%. Japan also possesses neodymium PM processing technology, but its market share remains at about 10-15%.

PM is a material that maintains permanent magnetism as long as certain conditions are met. It is manufactured by mixing steel, boron, and a very small amount of neodymium or samarium cobalt. Among these, neodymium PM's magnetic force overwhelmingly surpasses other rare earths, so it is mainly used in high-power electric devices.

Electric motors equipped with neodymium PM are called 'Permanent Magnet Motors (PM motors).' PM motors are invariably used in fields requiring high-power motors, such as electric vehicles and wind turbines. Thanks to PM's excellent magnetic force, the 'power density (output per unit weight)' is much higher than other electric motors.

Especially in electric vehicles, PM motors can be considered a core element determining performance. The high power density of PM motors increases the overall efficiency of the powertrain (the assembly of components that deliver power to the vehicle), enabling electric vehicles to travel farther and faster.

Therefore, if the neodymium PM market is completely dominated by China, it could have a much more severe long-term impact on the electric vehicle industry than secondary batteries. If exports of Chinese-made neodymium PM are restricted due to trade disputes, the automotive parts supply chain would collapse immediately. This situation is entirely different from lithium-ion batteries, which have substantial production capacity outside China.

Moreover, if only China builds a robust electric vehicle supply network worldwide, Chinese automakers such as BYD, Changcheng Automobile, Geely Group, and NIO, which own prominent electric vehicle manufacturers, are likely to benefit significantly.

UK Reduces Rare Earth Content, Tesla Aims to Make 'Rare Earth-Free Magnets'

Axial flux motor by British motor technology company 'YASA'. It delivers high output and torque, reducing the use of rare earth materials. [Image source=YASA]

Western automakers have repeatedly attempted to create 'non-rare earth PMs.' Although neodymium PM motors still boast unmatched performance, as the US-China trade dispute intensifies and supply chains become unstable, efforts to find alternatives are expected to gain momentum.

A representative example is the British motor technology company 'YASA.' Founded in 2009, the company was recognized for its technology in 2021 and acquired by the German Mercedes-Benz, now operating as its subsidiary.

The electric motor developed by YASA is an 'Axial-flux motor (AF motor).' Typically, PM motors have rotors that rotate radially by magnetic forces inside and outside the stator within the engine, but YASA's AF motor rotor rotates axially. The axial rotation method provides higher torque.

Strictly speaking, YASA's AF motor is not an alternative to PM motors. YASA also uses rare earth permanent magnets. However, it has the advantage of significantly reducing the amount used. This is because an AF motor of the same weight has much stronger output and torque than conventional PM motors. This is why YASA is regarded as a 'safe option' by relatively latecomer European electric vehicle manufacturers.

The non-rare-earth permanent magnet electric motor that Tesla announced it is developing at last month's 'Investor Day.' [Image source=Tesla]

Meanwhile, Tesla, a leader in electric vehicles, attracted attention last month at its business strategy presentation by announcing plans to produce PM motors with zero grams of rare earth content.

Tesla has not yet disclosed the specific alloy for the magnets or whether these magnets can surpass the magnetic force of neodymium PMs. However, if Tesla truly succeeds in developing and mass-producing 'rare earth-free PMs,' it will completely change not only the electric vehicle industry but also the global geopolitical landscape.