Chinese export restrictions prompt automotive industry to adopt alternative magnet technologies and motor designs for electric vehicles.
21 Nov 2025 | 4380 Views | By Shruti Shiraguppi
China's 2025 rare earth export licensing system has disrupted EV motor production globally, with manufacturers including Maruti Suzuki, Lucid Motors, Ford, Suzuki Motor, Bajaj Auto, and Ather Energy forced to delay or reduce output.
The restrictions target dysprosium and terbium, heavy rare earth elements used in the neodymium magnets ...
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China's 2025 rare earth export licensing system has disrupted EV motor production globally, with manufacturers including Maruti Suzuki, Lucid Motors, Ford, Suzuki Motor, Bajaj Auto, and Ather Energy forced to delay or reduce output.
The restrictions target dysprosium and terbium, heavy rare earth elements used in the neodymium magnets that account for 1-3kg per motor in approximately 87% of the global EV market. While export licenses began easing tensions from July 2025, the disruption has redirected industry focus toward reducing dependence on Chinese rare earth supplies through alternative technologies and materials. IDTechEx's latest research identifies multiple pathways for the automotive sector to achieve this shift.
China controls 69% of rare earth mining globally and accounts for approximately 90% of downstream separation, metallization, and magnet production. The country's new licensing requirement for exports has complicated procurement for manufacturers worldwide, sparking renewed efforts to develop domestic rare earth capabilities and alternative solutions. However, mining, production, and recycling initiatives in other regions remain longer-term strategies requiring substantial investment to establish competitive supply chains.
Motor manufacturers are pursuing multiple approaches to reduce rare earth dependency. Improving power density through design optimization enables higher-speed motors that require less overall material while maintaining performance levels. Japanese automakers including Toyota, Nissan, and Honda have historically reduced heavy rare earth content through material engineering techniques such as grain structure refinement and impurity control.
Enhanced thermal management systems also diminish the need for heavy rare earths, which primarily prevent demagnetization at elevated temperatures. Manufacturers have increasingly adopted direct oil cooling for motor components, though demagnetization of rare earth magnets is irreversible, requiring careful thermal system design. These approaches currently reduce rare earth usage by tens of percentage points rather than eliminating it entirely.
Externally excited synchronous motors (EESM) offer a commercially viable magnet-free option already adopted by Renault, BMW, and Nissan in production EV models. These motors use copper electromagnets on the rotor instead of rare earth permanent magnets but require additional power systems for rotor windings and typically demonstrate lower efficiency on standard driving cycles. Manufacturing costs remain price-sensitive, making EESM economically attractive when rare earth prices rise but less appealing when prices fall.
Other permanent magnet-free designs including synchronous reluctance, switched reluctance, and induction motors present alternatives but generally struggle to match the performance and efficiency of rare earth-based motors.
Ferrite magnets represent a readily available option unconstrained by Chinese supply. However, their significantly lower magnetic performance necessitates substantially larger quantities of material, resulting in larger motors for equivalent output and creating rotor construction challenges. Ferrite motor designs could serve vehicle segments prioritizing lower performance requirements.
Emerging alternatives such as those developed by Niron Magnetics and Proterial aim to bridge performance gaps between ferrite and rare earth magnets. If successful, these materials could provide sufficient performance for multiple motor applications at reduced costs and with diminished supply chain vulnerability.
IDTechEx research forecasts that nearly 30% of the EV market will employ rare earth-free motors by 2036. This projection reflects the continued dominance of China in EV and rare earth production, with Europe and the United States adopting rare earth-free alternatives at significantly higher rates.