Traditionally, electric traction motors use permanent magnets made with rare-earth metals. However, materials such as dysprosium and neodymium are a limited resource. In addition to their rarity, extracting and processing these materials has environmental consequences, leaving behind a significant amount of toxic waste.
And, since China accounts for the vast majority of rare-earth production, logistics and price volatility are another challenge facing electric vehicle manufacturers. The volatile supply of neodymium—the main rare-earth metal used in electric motors—means there’s a good chance that its price will continue to skyrocket.