Will China hold our electric future at ransom? Not if Toyota can help it

Toyota’s Akira Kato demonstrates lean neodymium. (c) Bertel Schmitt

If the supply of electric vehicles is to grow as predicted, the demand for strategic materials will increase along with it. The various oil crises of the past, and the wars that came with it, illustrate where such a dependency can lead. As far as electric vehicles are concerned, two choke points have been identified: The supply of cobalt needed to make batteries, and the supply of rare earth minerals needed to make the magnets in electric motors.

There are two ways to address the problem. We can hope it will take care of itself. Or we can do something about it. Toyota is in the second camp, and it aims to reduce the dangerous dependency on neodymium. Expensive neodymium already is the main cost driver in the production of magnets, we heard today at a meeting at Toyota’s Tokyo HQ. If electric vehicles will gain popularity as expected, shortages of neodymium could occur as early as 2025, Akira Kato, general project manager at Toyota’s R&D company, told us today.

Kato shows when neodymium demand will outstrip supply (c) Bertel Schmitt

This is exacerbated by the fact that China wields a virtual monopoly on neodymium, and the country already used it as a weapon. During the row over the Senkaku islands, China enacted a temporary export ban of neodymium, triggering a rare earth crisis. When China clamped down on illegal miners last year, the price of neodymium exploded.

The unpleasant specter of a dependency on neodymium and China hastened research at Toyota. In 2010, the company patented a first step towards the reduction of neodymium content, a second step was patented three years later. The final, and most important step was patented last year. With the technology, Toyota can reduce its dependency on the strategic metal by up to 50 percent while maintaining the performance of the magnet, Kato told us today.

An in-depth description of the research can be found here.