Rare Earth Metals Avoided by Toyota and Tesla


The problem with fossil fuels, its depletion and rarity, is now becoming one of the major issues in electric vehicle technology. Rare earth metals have become much more in demand because of the increasing demand for green cars in the market.

One company has veered away from the pack. Toyota is currently nearing completion of a hybrid car “induction motor” that does not use rare earth metals. These rare earth metals are used in many consumer electronic devices and clean technologies, such as magnets in electric cars and hybrids currently out in the market. It is also used in cell phones, wind turbines and hard drives.

This decision by the Japanese automaker is similar to its decision to create the hybrid technology used in its immensely popular Prius model. It is also a response to the increasing rarity of rare earth metals. In another complementary move, the company has engaged the services of Tesla for $60 million to help in the development of the company’s RAV4 line, using the rare earth free induction motor of Tesla to create its first electric SUV model.

The said motor is similar to Tesla’s Roadster sports car and the 2012 Model S sedan. According to reports, these new motors are lighter and more efficient than the current top of the line model, the magnet-type motor which the Prius has. Since hybrids use rare earth minerals such as dysprosium and neodymium in the motors, these technologies are thus at the mercy of the country holding the most supply, much like the OPEC with fossil fuels.

This decision clearly blazes the trail for Toyota to avoid the impending price war for rare earth metals. Also, it is a preparation to provide green cars available to the market at reasonable prices as the technology develops.

Because of the increasing scarcity of rare earths, the prices are sure to gallop exponentially. China would be holding all the cards in this market as it holds almost 90% of all rare earth deposits in the world. In a recent move, China has announced it would decrease its exportation of rare earth metals by 75%, creating an artificial shortage sure to drive prices through the roof. This move also has created ripples not only in the electric vehicle market but even oil refineries throughout the world.

The battle is still ongoing, with talk of filing complaints with the World Trade Organization about China’s bullying tactics on rare earth metals. With the move of Toyota, the market is now seeking to reinvent itself to prevent the lessons of the oil crisis in the seventies.