The carmakers invest in a ferrite nitride-based magnet startup.
Western carmakers are constantly searching for ways to diversify their supply chains, including their electric vehicle value chains. Especially the permanent magnets built inside the motor have recently become a talking point in diversification efforts because these magnets are made of rare earths. These minerals are classified as critical by numerous organizations and countries around the world, and most of the global mine production is in Chinese hands. Looking at downstream processes, China even accounts for 85 or 90 percent of the world’s rare earth magnet production, depending on the source. Forgoing rare earths in the magnets could bypass this monopoly. However, rare earth magnets are currently known to be superior to more common ferrite-based magnets as they have high amounts of magnetic energy despite being lighter. Finding a viable substitute is the goal of GM and Stellantis’ investment in the rare earth-free magnet startup Niron Magnetics. According to a press release, together with other investors, the two car manufacturers invest a combined $33 million into Niron. The magnet company is working on self-described ferrite nitride-based magnets, which it claims to have “inherently high magnetization.”
With or Without Rare Earths?
Despite this announcement, both GM and Stellantis have also signed agreements with rare earth or rare earth magnet producers recently. While GM tapped German manufacturer Vacuumschmelze and fellow U.S.-based MP Materials for rare earth magnets, Stellantis signed a term sheet with Canadian producer of rare earth oxides NioCorp just a few months ago. The investment into Niron could thus be a form of diversification in the overarching value chain instead of moving to eliminating rare earths from it.
Similarly, fellow carmaker Tesla had announced similar intentions by announcing plans to remove rare earths entirely from its next-generation EV motors earlier this year. Yet, CEO Elon Musk discussed joint research projects in the field of rare earths and copper with Mongolia’s Prime Minister in the following summer, according to the state news agency Montsame, casting doubt on Tesla’s plan.