BOSTON, May 23, 2024 /PRNewswire/ -- The sourcing of
materials and components is becoming an increasingly discussed
topic across multiple industries. One huge growth sector is the
electric vehicle (EV) market, with IDTechEx predicting 4 fold
growth in electric car sales over the next 10 years. Much of the
conversation is focused on battery materials, but the rare earths
used in the magnets in electric motors are another key concern.
These are almost entirely produced in China and have been subject to significant
historic price volatility. Given these concerns, it is surprising
to see that IDTechEx's research has found that rare earth permanent
magnet motors have maintained over 77% of the electric car market
over the last 9 years. Why is that the case?
The IDTechEx report "Electric Motors for Electric Vehicles
2024-2034" predicts that over 140 million electric motors will be
required for EV markets. While it predicts a decline in the market
share of rare earth motors, it predicts that the majority of the
market in 2034 will still be using permanent magnet motors.
What are the concerns?
China largely controls the
supply of rare earth materials, and this has historically led to
significant price volatility. In 2011, after China restricted its exports of rare earths,
the price of neodymium and dysprosium rose by approximately 750%
and 2000%, respectively. Prices rose again in 2021 and 2022 to a
peak in 2022 of around 4 times its average over the previous 8
years. While the price settled again in 2023 and the start of 2024,
this remains a concern for the future.
Local sourcing of materials and improving domestic supply chains
have become an increasing focus for many industries and governments
that want to secure their future. As an example, the US has
allocated resources to improving its domestic supply of rare
earths, but it will take time to bring these ventures online.
Rare earths also present environmental concerns around mining
and processing, and the waste generated in doing so.
What is the state of the market and technology?
Permanent magnet motors remain the dominant technology in EVs.
Thanks to the previously mentioned concerns, there has been
progress with rare earth free alternatives. Renault has used
externally excited synchronous motors (EESM) in EVs since the Zoe,
and other manufacturers like BMW have adopted this approach.
However, while these motors reduce the material costs, their
manufacturing is typically more complex thanks to copper windings
on the rotor and the need for rotor excitement. Hence,
manufacturing costs are typically higher.
Rare earth free magnets are another solution, at varying levels
of commercial readiness, with companies like Proterial stating its
magnets "deliver the world's highest levels among ferrite magnets".
Niron Magnetics is developing iron nitride magnets, with its
next-generation versions planning to rival neodymium performance.
PASSENGER is a European project developing strontium ferrite and
manganese aluminum carbon alloys. There are significant efforts in
this arena, and while these materials are unlikely to be a
like-for-like replacement for rare-earth magnets in the near
future, the benefits of lower cost and supply stability could be
enough to swing the market in this direction, with IDTechEx
predicting a 12% share for rare earth free magnets in the market by
2034.
Why permanent magnet motors remain the dominant
technology
There are two primary factors (with multiple considerations
therein) that drive the choice of motor technology: performance and
cost. Rare earth permanent magnet motors tend to provide the
highest power and torque density, efficiency, and low manufacturing
costs. Their major downfall is the bill of materials costs, with
the magnets often accounting for around a third of the total motor
material costs.
From their 2022 peak, rare earth prices have settled, leading to
permanent magnet motors becoming cost-competitive again and taking
some of the immediate emphasis away from the need for alternatives.
Most tier 1 suppliers now offer the option for permanent magnet
motors or EESMs, but it is down to the OEM to make that commitment.
From IDTechEx's interviews with OEMs, most have available options
for EESMs in-house or through suppliers, but they are mostly
reserved in case magnet prices rise significantly or the need to
localize material supply increases (through geopolitical or
regulatory pressure).
A larger question
Unless we see a significant improvement in rare earth free
magnets, or a large regulatory push, rare earth permanent magnet
motors are likely to retain the majority of market share,
especially given China is the
largest EV market and has less incentive to move away from rare
earths.
One question that should be asked is whether drivers really need
as much power as is often installed in vehicles or dual motor
variants? Dual motor variants are typically less efficient and
utilize more materials to create and install the second motor.
These higher powers and extra motors are not needed for the vast
majority of the time, much like larger vehicles in general.
However, the more powerful, higher trim models appeal to a
different consumer demographic and give OEMs an opportunity to
increase their profit margins. If this helps EVs gain further
market share, displacing combustion engines, then perhaps this is
the lesser of two evils.
IDTechEx's report, "Electric Motors for Electric Vehicles
2024-2034", takes a deep dive into the types of electric motors
used in electric vehicles as well as emerging alternatives like
axial flux and in-wheel motors. The report considers the EV market
for cars, buses, trucks, vans, two-wheelers, three-wheelers, and
microcars across China,
Europe, and the US, including
forecasts for motor demand by technology and materials used over
the next 10 years.
To find out more about this IDTechEx report, including
downloadable sample pages, please visit
www.IDTechEx.com/motors.
For the full portfolio of electric vehicle market research from
IDTechEx, please see www.IDTechEx.com/Research/EV.
About IDTechEx:
IDTechEx provides trusted independent research on emerging
technologies and their markets. Since 1999, we have been
helping our clients to understand new technologies, their supply
chains, market requirements, opportunities and forecasts. For more
information, contact research@IDTechEx.com or
visit www.IDTechEx.com.
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