Adamas Intelligence expects demand for permanent magnets to rise sharply, but production is not keeping pace.
The e-car manufacturer Tesla has announced that it would abandon the use of rare earths and the semiconductor material silicon carbide in the future. This announcement caused the share prices of companies from these sectors to plummet in the meantime. But at least with regard to rare earths such as neodymium or dysprosium, the violent reactions on the market are likely to be largely unfounded, as a report by the consulting firm Adamas Intelligence suggests. If Tesla were to consistently abandon the use of neodymium-iron-boron (NdFeB) magnets, the overall market would lose only about two to three percent as a result, it says. At the same time, Adamas Intelligence predicts that global NdFeB demand will triple by 2035, but production will only double over the same period. In any case, the largest demand would come from the expansion of wind power, and the vehicle industry would play only a minor role.
More e-cars make recycling more attractive
However, the applications for NdFeB magnets are far from exhausted. The efficiency of this material comes into play wherever compactness and weight are a decisive factor. Rare earth magnets therefore have an advantage over Tesla’s most likely alternative for the traction motor: ferrite. The e-car manufacturer has not confirmed this assumption by Adamas, but promised an improved environmental balance compared to the use of rare earths during an investor meeting. Adamas Intelligence takes a much more differentiated view of this point, saying that the impact on people and the environment has improved in recent years.
There has also been considerable progress in the area of recycling. For example, the Japanese car company Nissan has been able to recover 98 percent of the rare earths used in an electric motor in experiments. In view of the rapidly increasing number of e-cars that will be available for recycling in the future, the development of a recycling economy for the resources they contain will play an important role. In this context, Adamas points to the large number of new market players who have discovered recycling as a business model and are driving it forward. New options for procurement in the e-car industry are therefore available, according to the consulting firm.
Photo: iStock/xiao zhou