On March 1, 2023, Colin Campbell, Tesla’s vice president of powertrain engineering, said that the drive unit of its next-generation electric vehicles will use a zero-rare-earth permanent magnet motor. The news triggered a drop in shares of Chinese rare earth companies. The picture shows rare earths waiting to be exported in Lianyungang, China. (STR/AFP)
[The Epoch Times, March 13, 2023](Comprehensive report by Epoch Times reporter Zhang Wan) Tesla executives recently revealed at its 2023 Investor Day that its next-generation powertrain plans for electric vehicles will not Use rare earth again. As a leader in the global electric vehicle market, if Tesla’s zero rare earth permanent magnet motor plan is successful, it will have a huge impact on the rare earth market, especially the CCP’s rare earth monopoly.
On March 1 this year, at the Tesla 2023 Investor Day, Colin Campbell, vice president of Tesla Powertrain Engineering, said: “As the world transitions to clean energy, the demand for rare earths is indeed increasing. It will be a bit difficult to meet that demand, and mining rare earths has environmental and health risks. We want to do better.” “We designed the next drive unit, which uses a permanent magnet motor that does not contain any rare earth materials at all. “
However, Campbell did not specify what materials the next generation of zero-rare-earth permanent magnet motors will use.
The company’s live broadcast shows that currently, there are three types of rare earths used in the Tesla Model Y, the first is about 500 grams, and the other two are 10 grams each.
Tesla also said on the same day that between 2017 and 2022, the use of rare earths in the Tesla Model 3 has been reduced by 25% due to improved powertrain efficiency.
After the news that Tesla plans to abandon rare earths was released, as of March 10, the stock price of Northern Rare Earth (600111.SHA), China’s largest rare earth supplier, fell by nearly 10%; )’s stock price fell by 5.9%; Shenghe Resources (600392.SHA)’s stock price also fell by 10%.
Compared with traditional excitation generators, permanent magnet motors, especially rare earth permanent magnet motors, have higher magnetic energy product and coercive force (ability to resist demagnetization), so they have the characteristics of reliable operation, small size, light weight and high efficiency . The energy conversion efficiency of rare earth permanent magnet motors can usually reach 90%, and the best can reach more than 98%.
In fact, rare earth permanent magnet motors use the most rare earth neodymium iron boron (NdFeB) magnet material, but there is a supply gap.
According to a report by Caitong Securities Research Institute, from 2020 to 2023, the supply gap of praseodymium and neodymium oxide, the front-end raw material of NdFeB magnets, is expanding year by year, and the proportion of the gap to the current supply will increase from 1.6% in four years. expanded to 8.2%.
Currently, the supply of rare earths is highly monopolized by the CCP. According to data released by the United States Geological Survey (USGS) this year, by 2022, China’s rare earth reserves will account for 34% of the world‘s proven reserves, and China’s rare earth production will reach 70% of global production.
Under the current situation of heightened tension in US-China relations, US President Biden signed and passed the “Inflation Reduction Act” (The Inflation Reduction Act) in August last year. The bill establishes a roadmap for gradually reducing China’s supply of key minerals such as lithium and rare earths in battery materials for electric vehicles sold in the United States by modifying the eligibility for subsidies for electric vehicles.
Tesla’s Zero Rare Earth Motor Technology Could Have Widespread Impact
Tesla holds the No. 1 share in the global electric vehicle market. In 2022, Tesla will deliver a total of more than 1.31 million electric vehicles, accounting for 18.2% of the global pure electric vehicle market share, ranking first in the world. Since 2018, Tesla has easily captured more than 60% of the U.S. electric vehicle market. In the European market, Tesla’s Model Y and Model 3 are the two most popular electric vehicles in Europe in 2022.
According to estimates by Adamas Intelligence, a rare earth consulting company, global electric vehicle motors account for 12% of the global consumption of rare earth NdFeB magnets; while Tesla accounts for 15% to 20% of it.
Adamas estimates that if Tesla abandons rare earths, assuming Tesla can maintain its leading position in the electric vehicle market, the global NdFeB material market will only lose 2% to 3% of demand in the short term, and in the long run The maximum loss is 3% to 4%.
However, Tesla’s zero-rare-earth motor strategy is accused of having a wide-ranging impact. If the plan is successful, the reduced supply chain risk and potential cost advantages brought about by the plan may drive other car companies to increase the development of rare earth-free permanent magnet motors.
The electric vehicle market is rapidly expanding globally. In 2022, electric vehicles will only account for 10% of global car sales. However, a forecast report released by Goldman Sachs in March 2022 stated that in view of the promotion of global carbon neutrality goals, the sales weight of global electric vehicles is expected to increase to 15% in 2025 and 32% in 2030; will increase to 58%. In the U.S. and Japan markets, it is expected that the ratio will reach 80% in 2040, and in Europe it will reach 100%.
In addition, the development of zero-rare-earth permanent magnet motor technology may also have broader ramifications. In addition to new energy vehicles, rare earth permanent magnet motors are used in many fields such as wind turbines, traditional automobile motors, frequency conversion appliances (air conditioners, refrigerators, washing machines, etc.), industrial robots, and energy-saving elevators.
China’s main permanent magnet rare earth
Rare earth materials are widely used, and can be divided into rare earth permanent magnet materials, rare earth hydrogen storage materials (important raw materials for manufacturing nickel-hydrogen batteries), rare earth catalytic materials (evolution of automobile exhaust, petrochemical, etc.), rare earth luminescent materials (to improve photovoltaic power generation efficiency) ) and rare earth polishing materials (important materials for making spectacle lenses, optical glass, and liquid crystal panels).
According to the report “Development Status of China’s Rare Earth Industry in 2023” by Zhiyan Consulting, among rare earth functional materials, rare earth permanent magnet materials are the most widely used and most demanded materials in the market, and are also the most produced rare earth materials in China. .
According to the report, the production of rare earth functional materials in China in the first half of 2022, except for rare earth permanent magnet materials and rare earth catalytic materials for motor vehicle exhaust purifiers, the production of other rare earth functional materials all decreased year-on-year. The output of rare earth permanent magnet materials accounted for nearly half of China’s output of rare earth functional materials in the first half of the year.
Some commentators believe that once the market demand for permanent magnet materials changes greatly, it will be a huge blow to Chinese companies.
China sees rare earths as political chips
In 2010, after the dispute over the Diaoyu Islands between China and Japan escalated, the CCP began to restrict the export of all 17 kinds of rare earth materials to Japan in order to blackmail Japan. This move has made Western countries aware of the dangers of relying on the Chinese Communist Party for supply chains.
Since 2011, the CCP began to establish the so-called strategic rare earth reserve system, using rare earths as strategic resources, collecting and storing large quantities of rare earth raw materials such as praseodymium neodymium oxide, yttrium oxide, dysprosium oxide, praseodymium oxide, neodymium oxide, and erbium oxide.
At the same time, the CCP has implemented a quota system for the total amount of rare earth mining and smelting and separation, and concentrated rare earth production in a few rare earth groups controlled by the government (including Northern Rare Earth, China Rare Rare Earth, Minmetals Rare Earth, Xiamen Tungsten Industry, South Rare Earth, Guangdong Rare Earth, etc.), further strengthened the control over the global rare earth supply and price.
At the end of May 2019, Gao Feng, the spokesperson of the Ministry of Commerce of the Communist Party of China, claimed that it only meets the “legitimate” requirements of rare earth resources from all over the world. If any country wants to use China’s export of rare earth products to contain and suppress the CCP, it will be unacceptable.
At that time, the CCP’s media, People’s Daily, also issued an article clamoring, “The United States should not underestimate” the CCP’s countermeasures.
Editor in charge: Lian Shuhua #