GM Signs Electric Vehicle Motor Magnet Supply Agreements – NBC 5 Dallas-Fort Worth
General Motors has taken two more steps to ensure it has the raw materials it needs to transition from petroleum to battery power, this time lining up magnets for electric vehicle motors.
On Thursday, the company announced that it has reached an agreement with MP Materials to supply rare earth metals and finished magnets for motors to a new plant to be built in Fort Worth, Texas, starting in 2023.
He is also negotiating what will likely be a joint venture with Germany’s Vacuumschmelze (VAC) to build a US plant to manufacture magnets for electric vehicle motors. Production is due to start in 2024 and will create “hundreds of new jobs,” the companies said.
The companies did not announce the financial terms of the agreements. Shilpan Amin, GM’s purchasing and supply chain manager, said he has entered into a parts supply agreement with MP Materials without GM’s capital investment. The company’s capital structure with VAC is still being worked out, but the companies have said they will build a factory together.
At present, there are no factories in the United States equipped for the large-scale production of electric vehicle motor magnets, Amin said. MP said 90% of the supply now comes from China.
The moves come as automakers scramble to align parts supplies for what is expected to be a radical shift from internal combustion engines to zero-emission electric power over the next decade. GM, for example, aims to sell only electric passenger vehicles by 2035.
Consulting firm LMC Automotive expects sales of new all-electric vehicles in the United States to reach nearly 400,000 this year, almost double the numbers from last year. But they still only represent around 2.6% of sales. But the company expects sales to reach over 730,000 next year and over 2 million by 2025. Even at 2 million, sales of electric vehicles would still only account for around 12% of sales. of new vehicles in the United States.
MP Materials has the potential to supply magnets for about 500,000 EV motors per year, Amin said. Combined, the two agreements will provide all of GM’s magnet needs for at least the near term, the company said.
MP said engineering and design work for the new 200,000 square foot plant is underway and it will employ more than 100 people. The plant’s products will also be destined for the clean energy, electronics and defense markets, the company said.