General Motors announced two major partnerships related to rare earth permanent magnets for Ultium platform electric motors in North America.

MP Materials - mine in California, production in Texas

The first one is a strategic collaboration with MP Materials to develop a fully integrated U.S. supply chain for rare earth magnets.

Under the long-term agreement, MP Materials will supply U.S.-sourced and manufactured rare earth materials, alloy and finished magnets for GM's Ultium-based EVs. A gradual production ramp will begin in 2023.

MP Materials owns and operates the Mountain Pass rare earth mine and processing facility in California. According to the press release, it's the only active and scaled rare earth production site in America and it produced approximately 15% of the rare earth content consumed in the global market in 2020. Not only that, it's a "closed-loop, zero-discharge rare earth production facility with a dry tailings process that recycles more than 1 billion liters of water per year."

Additionally, MP Materials will build a new production facility in Fort Worth, Texas, where the rare earth materials from California will be transformed into metal, NdFeB alloy and magnets.

"GM and MP Materials have signed a binding agreement on terms and expect to enter into a definitive supply agreement shortly. In addition, the two companies will look to collaboratively engage from a public policy perspective to seek policies that are supportive of the establishment of a secure, U.S. rare earth supply chain."

Update: MP Materials says that should be able to produce enough NdFeB magnets for approximately 500,000 EV motors annually:

"MP’s initial magnetics facility will have the capacity to produce approximately 1,000 tonnes of finished NdFeB magnets per year with the potential to power approximately 500,000 EV motors annually. The NdFeB alloy and magnets produced will also support other key markets, including clean energy, electronic and defense technologies. The facility will also supply NdFeB alloy flake to other magnet producers to help develop a diverse and resilient U.S. magnet supply chain. "

General Motors and MP Materials Enter Long-Term Supply Agreement to Scale Rare Earth Magnet Sourcing and Production in the U.S.

GM seeks for an end-to-end, U.S. supply chain of critical components for its all-electric vehicles.

"Neodymium-iron-boron (NdFeB) magnets are critical inputs that enable electric motors to transform electricity into motion. Although development of permanent magnets began in the U.S., there is virtually no domestic capacity to produce sintered NdFeB magnets today. This strategic collaboration seeks to accelerate the restoration of the U.S. rare earth supply chain at commercial scale with high resiliency and environmental sustainability."

GM Ultium Platform: GM’s 180-kW, permanent magnet EV motor will be used for front-wheel drive and all-wheel drive applications.
GM Ultium Platform: GM’s 180-kW, permanent magnet EV motor will be used for front-wheel drive and all-wheel drive applications.
GM Ultium Platform: GM’s 255-kW, permanent magnet EV motor will be used for performance all-wheel drive and rear-wheel drive applications.
GM Ultium Platform: GM’s 255-kW, permanent magnet EV motor will be used for performance all-wheel drive and rear-wheel drive applications.

Shilpan Amin, GM vice president, Global Purchasing and Supply Chain said:

“We are building a resilient and sustainable EV manufacturing value chain in North America, from raw materials to cell manufacturing to electric drive motors and beyond, further accelerating GM’s vision to support a mass market for EVs. Our work with MP Materials is another bold step forward that will help ensure that we meet our goal to lead the EV industry in North America in more than just sales.”

MP Materials Chairman and CEO James Litinsky said:

“Restoring the full rare earth supply chain to the United States at scale would not be possible without U.S. manufacturers like GM recognizing the strategic consequence and acting with conviction. We are proud to welcome GM as the foundational automotive customer for our new magnetics facility and join forces with a company fully aligned with our vision to reinvigorate the American manufacturing spirit.”

Vacuumschmelze (VAC) new magnet factory

The second announcement is about the partnership with Vacuumschmelze (VAC), described as a global producer of advanced magnetic materials and the largest producer of permanent magnets in the Western Hemisphere with nearly 100 years of experience.

The main point of the partnership is to build a new plant in the U.S. that will manufacture permanent magnets for the electric motors used in the Ultium platform.

This new plant would use locally-sourced raw materials, which most likely means MP Materials. The location of this new magnet factory has not been announced yet, but production should start in 2024.

"The plant is expected to start production in 2024 and create hundreds of new jobs. The location of the facility will be announced at a later date. The finished magnets will be delivered to facilities building EV motors for GM’s Ultium-powered EVs."

"A non-binding Memorandum of Understanding (MoU) has been completed. GM and VAC expect to finalize definitive agreements in early 2022."

Dr. Erik Eschen, CEO of VAC said:

“We are thrilled to join forces with GM on this journey into an increasingly electrified world, leveraging sustainable clean energy solutions. As VAC’s Permanent Magnet Division is the only industrial scale producer of rare earth permanent magnets in the Western Hemisphere, VAC brings reliable scale and experience to GM’s supply chain. VAC’s deep magnetic materials knowledge and extensive e-mobility technology expertise, in partnership with GM, will enable a cleaner global future for our communities,”.

Overall, it appears to be very good news that GM is securing the entire supply chain for the upcoming mass electrification:

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