General Motors plans to source rare earth magnets for its future electric vehicles (EVs) from new US-based manufacturing facilities as part of a reduction of reliance on China.
Agreements with MP Materials and German privately-held Vacuumschmelze are the latest push by GM to domestically source EV materials for its Ultium platform, a goal it hopes to achieve by 2025. GM did not disclose financial terms.
Shares of Las Vegas-based MP, which went public last year via a special-purpose acquisition company (SPAC) merger, were up 6.5% on Thursday. GM’s shares fell 1%.
The US administration is encouraging carmakers through tax incentives and other measures to invest and create EV supply chain jobs in the US and reduce reliance on Beijing.
GM, which hopes to sell more than 1 million EVs annually by 2025, signed a supply deal with a California lithium project in July and in October said it would work with General Electric to study rare earth supply chains.
Creating ‘More Value’
“The more we can recover natural resources for batteries and EVs from North America, process them here and manufacture them … the more value we can create,” Shilpan Amin, GM vice president of global purchasing and supply chain, said.
Large traditional car manufacturers are ramping up their efforts to electrify cars for the US market.
“The urgency to cut emissions is increasing and the threat from pure electric players such as Tesla, Rivian and Lucid is growing,” Rico Luman, an economist with ING in the Netherlands, said. “The potential entry of Chinese brands such as BYD is also adding to the pressure.”
GM, along with Ford and Stellantis, has already made plans to shift away from internal combustion engine vehicles.
At the COP26 meeting in Glasgow, GM and Ford pledged to work towards 100% zero emission new car and van sales in leading markets by 2035 “or earlier” and by 2040 at a global level.
- Reuters with additional editing by George Russell
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