EV makers pivot as China tightens rare earth exports

Chinese restrictions on rare earth exports have accelerated a shift in electric vehicle motor design, prompting automakers and suppliers to seek magnet-free alternatives.
Beijing's 2025 licensing system for rare earth shipments follows its dominant role in the supply chain - around 69% of mining and roughly 90% of downstream separation and magnet production - and led to short-term shortages that disrupted production at several OEMs in 2025.
Export licences began to be issued from July 2025, easing some immediate pressure, but manufacturers are pursuing longer-term resilience. One leading alternative is the externally excited synchronous motor (EESM), which uses copper electromagnets instead of permanent rare earth magnets. Renault, BMW and Nissan have already introduced EESM designs in some EV models.
Industry analysis forecasts that rare-earth-free motors could account for about 30% of the EV market by 2036, up from 13% in 2024 when 87% of EVs still used rare-earth-containing motors. Typical permanent-magnet motors contain 1–3 kg of neodymium and often small amounts of heavy rare earths such as dysprosium or terbium for high-temperature stability.
The trend reflects both supply-chain geopolitics and engineering trade-offs as automakers balance performance, cost and material security.