China’s rare earth is stuck in the neck of permanent magnet motors, and foreign manufacturers are trying to get rid of “neodymium” dependence
Rare earth permanent magnet motor is a kind of permanent magnet motor that appeared in the early 1970s. It has a series of advantages such as small size, light weight, high efficiency, and good characteristics. It is currently used by most automobile companies. Its internal key material is NdFeB magnets. Neodymium is a rare earth element. China occupies most of the production capacity. Some analysts believe that China can use this to block the global permanent magnet motor and even the neck of the new energy automobile industry. Is this really true?
Today, one of the main drivers of power electronics is the electrification of vehicles, where the electric motor is a key part of the powertrain, and any changes to the electric motor will affect the characteristics of other components of the powertrain, such as the battery and inverter. Yole Développement, a semiconductor consulting agency, predicts in the report “Motors for Automotive 2022” that by 2027, with major technological innovations and supply chain restructuring, the global motor market will exceed US$13 billion.
Abdoulaye Ly, Power Electronics Technology and Market Analyst at Yole, said: “There are currently four technologies used in traction motors for all-electric vehicles. They are permanent magnet synchronous motors (PMSM), permanent magnet assisted synchronous reluctance motors (PMaSynRM), induction motors (IM) and Electrically Excited Synchronous Motors (EESM). Today, PMSM technology is widely used in the Electric Vehicle (EV) industry. At Yole, we expect it to remain the dominant technology in the coming years, thanks to its High power density and efficiency. China is the largest electric vehicle market, and almost all Chinese automakers use PMSM.”
The big country of neodymium mining is not a big country of patents, and the necks are mutual
At the end of the last century, the NdFeB industry was still dominated by Japan, Europe and the United States, but now China has the most complete rare earth industry chain in the world. With the advantages of rare earth resources and cost advantages, the global industrial structure of sintered NdFeB permanent magnet materials has undergone major adjustments. There are only a few large overseas sintered NdFeB enterprises including Shin-Etsu Chemical, Hitachi Metals, TDK and Germany’s VAC. The combined output of the four companies accounts for 10%-12% of the world’s total, while China occupies about 85% of the global market share.
The main reason for the marginalization of Japanese and European manufacturers is that both Japan and Germany lack rare earth mines, but they are still monopolies in the industry in terms of high-end technology. The development of NdFeB in my country is divided into three stages: from 1983 to 1996, it mainly followed the development of foreign technologies; from 1996 to 2005, it solved the problem of large-scale production and started industrial mass production; Utilization and material serviceability issues.
According to data, Hitachi Metals is the world’s largest manufacturer and seller of sintered NdFeB. Through mergers and acquisitions and self-development, Hitachi Metals has obtained many patents for sintered NdFeB, and has more than 600 patents in the world, almost monopolizing all patents from NdFeB composition to sintered NdFeB production process. At present, there are eight domestic companies authorized to use patents by Hitachi Metals, including the above-mentioned Zhongke Sanhuan, Zhenghai Magnetic Materials and Ningbo Yunsheng, as well as Antai Technology, Beijing Jingci, Beijing Yinna, Ningbo Jinji and Anhui Didixiong.
In August 2012, Hitachi Metals of Japan and its sintered NdFeB magnet factory in the United States, Hitachi Metals North Carolina Corporation, applied to the US International Trade Commission (ITC) for the registration of four Chinese NdFeB enterprises (Zhenghai Magnetic Materials, 29 companies around the world, including Ningbo Golden Rooster, Anhui Earth Bear, and Hong Kong Chuangke, launched the “337 Survey”.
The outcome of the incident was that Zhenghai Magnetic Materials, Ningbo Jinji and Anhui Dadixiong reached a settlement with Hitachi Metals through responding to the lawsuit and obtained Japanese patent authorization.
The products of companies not authorized by Hitachi Metals patents cannot be exported to the US market, and the European market is subject to export restrictions. If most of China’s NdFeB enterprises are “blocked” by Hitachi Metal’s patent rights, enterprises will also face the severe test of survival rights and sharp decline in market share.
After this incident, seven Chinese rare earth companies established the “Strategic Alliance for Rare Earth Permanent Magnet Industry Technology Innovation”. The process route of NdFeB is different from that of Hitachi Metal.
In August 2013, the “Alliance” went to the U.S. Patent Office to sue Hitachi Metal for the invalidity of three core patents in its sintered NdFeB patent process patents; in China, four Ningbo companies in the alliance sued Hitachi Metal for abuse of market dominance. On December 11, 2014, the Ningbo Intermediate People’s Court accepted the case.
The case ended in the “Alliance” victory in 2016, and interested friends can search it. Huabao Securities believes that before this, most of the domestic NdFeB permanent magnet manufacturers were small in scale, weak in research and development capabilities, and their products were mainly low-end products, and their competitiveness was not strong; Through the introduction, digestion, absorption and independent research and development, we have gradually mastered the core technology of producing mid-to-high-end NdFeB, and the product quality has reached the international advanced level, gradually occupying a leading position in the domestic market.
Even so, due to the impact of patents, most domestic NdFeB permanent magnet material manufacturers are still unable to directly export products to the international market on a large scale. Downstream customers, especially well-known companies, are unwilling to take the risk of using patent-free products due to legal risks. Authorized NdFeB magnets and their components.
Tesla has also begun to use permanent magnet motors, but automakers are still committed to reducing their dependence on rare earths
At present, only a few companies such as Tesla are still using AC asynchronous motors on the market. In their front and rear dual-motor models, the front motors use AC asynchronous motors. When Tesla achieved early success, the AC asynchronous motor, as an important module of the electric system, was considered one of the key elements of its competitiveness. (EETC editor’s note: The scientist Tesla is also the inventor of the AC asynchronous motor, Tesla adopts this technology more or less with some feelings in it)
It is worth mentioning that since 2018, some of Tesla’s products have also switched to permanent magnet synchronous motors, including the commercial main product Model 3 Long Range (Long Range) models.
Screenshot of the EPA report of the Model 3 long-endurance version, the highlight part is the permanent magnet synchronous motor
This change has also emerged early. Zhongke Sanhuan secretly signed a three-year contract with Tesla in October 2016. The subject of the contract is the key material of permanent magnet motors-NdFeB magnets. Jinli Permanent Magnet also signed a parts procurement agreement with Tesla in September 2020 to supply NdFeB magnets.
The majority of automakers adopt permanent magnet synchronous motors, such as BMW and BYD. From the comparison of the two motors, the advantages of rare earth permanent magnets are very obvious, which is the development trend of the industry. Analysts at GF Securities believe that this advantage may make some new energy automobile companies that use AC asynchronous motors further switch to permanent magnet synchronous motors. .
In fact, Tesla is already the last major new energy vehicle manufacturer to switch to permanent magnet motor technology. Tesla’s obsession with not using permanent magnet motors will be further relaxed, which is also a gesture of favor to the Chinese market.
However, Yole believes that permanent magnet synchronous motors have one of the biggest risks for European and American companies, that is, most of the rare earth materials used in the manufacture of magnets come from China, and their smelting and processing are mainly in China. Magnets can account for as much as 40% of the total cost of a permanent magnet synchronous motor. Automakers using permanent magnet synchronous motors could be severely impacted by magnet shortages or cost fluctuations if one of the following occurs:
• Chinese government restricts exports of rare earth materials to meet local demand.
• US and European governments impose commercial sanctions on China.
Considering the above situations, in order to avoid being “stuck”, it may be the reason why Tesla continues to use AC asynchronous motors in all other models – Model X and Model 3 standard versions, and strives to increase its power density. Compared with other aluminum rotors, Tesla’s AC asynchronous motor uses a copper rotor and has a patented technology, so that the AC asynchronous motor can also achieve small size and high power.
A research report on the official website of the U.S. Department of Energy also talked about this issue. Tesla did not choose the permanent magnet motor route at the beginning. The main reason was the concern about the instability of China’s supply chain, which corroborated the engineers’ statement.
Yole analysts expect non-Chinese automakers to reduce their reliance on rare earth materials by developing new technologies or improving existing non-magnetic technologies.
As shown in the diagram above, automakers primarily use one of three business models for traction motors:
In-house manufacturing, such as BYD, Tesla, BMW, etc.;
Outsourcing, such as Ford, Geely, Mitsubishi, Mazda, etc.;
Hybrid business models that combine in-house manufacturing and outsourcing, such as Toyota, Honda, Audi, Hyundai, etc.
Traction motors are part of the drivetrain. There is also a definite trend towards integrating all powertrain elements, with automakers taking a holistic approach, treating the powertrain as a single item. This holistic approach has completely reshaped the electric motor supply chain:
• Automakers have a single powertrain supplier or manufacture their powertrains in-house.
• Motor and inverter manufacturers increase their capabilities by acquiring other companies or investing in providing customers with complete solutions.
The traction motor market is led by the three major automakers: Tesla, BYD and Volkswagen, and industry-leading Tier1 suppliers including Nidec and Vitesco are also actively expanding in this market.
According to Reuters, in order to reduce dependence on permanent magnets, Volkswagen is using permanent magnet motors with lower rare earth content, containing only terbium and dysprosium; Daimler and BMW also plan to reduce the use of rare earth permanent magnets, or even redesign A motor that does not contain rare earth elements; Nissan and Toyota have also tried it.
In 2011, Toyota equipped its small hybrid car FREED with a permanent magnet motor that does not contain heavy rare earth elements; in 2018, Toyota developed a motor that reduced the amount of neodymium by more than 20%, replacing it with lower-priced rare earth lanthanum and cerium part of neodymium. The company plans to use the magnets in electric vehicles within 10 years, but the technology is mostly used in hybrid models.
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