General Motors announced a deal to source rare earth metals for electric vehicle motors in North America. Under the agreement, Las Vegas-based MP Materials will supply the automaker with “US-sourced and manufactured rare earth materials, alloy, and finished magnets for the electric motors” that will be used to power GM’s upcoming lineup of electric vehicles.
Electric motors are powered by permanent magnets, sometimes no larger than a pack of playing cards, that are made of rare earth metals. The magnets enable the motors to transform electricity into motion, thus powering the vehicle. But these rare earth magnets, mostly made of neodymium (NdFeB), are almost entirely mined and processed in China. And as tensions grow between China and the US, automakers are under increasing pressure to find more localized sources of these key materials.
GM has said it plans to become an EV-only company by 2040, meaning it will need to make millions of electric motors every year. In a call with reporters, the company’s executives said that this agreement with MP Materials, in addition to other recent announcements, will help ensure that most of the materials that comprise its Ultium EV platform will come from within North America by 2025.
“I think most people outside our industry would be shocked to learn that there are virtually no factories in the US building these magnets at scale,” said Shilpan Amin, GM vice president for global purchasing and supply chain. “Well that’s about to change.”
GM said it picked MP Materials for its location and capacity to produce rare earth materials at scale. The company owns and operates a rare earth mine and processing facility in Mountain Pass, California. The materials sourced from this facility will be transformed into an NdFeB alloy and magnets at a new production factory that MP Materials will build in Fort Worth, Texas. The plant is expected to start production in 2024.
Once its up and running, the Fort Worth facility will have the capacity to produce “around 1,000 tons of finished magnets per year,” GM said. That amount of rare earth materials has the potential to power approximately 500,000 EV motors annually, the automaker noted.
Despite the name, rare earth metals 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, experts say a shortage may lie ahead. Some automakers have been looking to replace or limit the use of rare earth materials for years.
Much like the rest of the auto industry, GM is racing to boost its EV offerings, vowing to spend $35 billion on the development and production of 30 new electric vehicles by 2025. To accomplish this enormous feat, the company is trying to get a stronger grasp on its supply chain, which includes electric motors and battery manufacturing.
The company has said it will spend over $4 billion on the construction of two battery factories and a new cathode factory in North America. The company also recently struck a deal to source lithium, a key ingredient in electric-car batteries, from geothermal deposits in the US. And it’s building a new 300,000-square-foot battery research facility in Michigan to help make electric vehicle batteries that are longer lasting, quicker to charge, and more sustainable for the environment.