LONDON (Reuters) – As tensions mount between China and the United States, automakers in the West are trying to reduce their reliance on a key driver of the electric vehicle revolution – permanent magnets, sometimes smaller than a pack of cards, that power electric engines. Most are made of rare earth metals from China.
The metals in the magnets are actually abundant, but can be dirty and difficult to produce. China has grown to dominate production, and with demand for the magnets on the rise for all forms of renewable energy, analysts say a genuine shortage may lie ahead.
Some auto firms have been looking to replace rare earths for years. Now manufacturers amounting to nearly half global sales say they are limiting their use, a Reuters analysis found.
Automakers in the West say they are concerned not just about securing supply, but also by huge price swings, and environmental damage in the supply chain.
This means managing the risk that scrapping the metals could shorten the distance a vehicle can travel between charges. Without a solution to that, the range anxiety that has long hampered the industry would increase, so access to the metals may become a competitive edge.
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