Rare Earth Permanent Magnet Applications in the Automotive Sector: Criticality and Circular Economy Challenges
On October 23, 2025, the EIT RawMaterials’ Strategic Impact Group Network (SIGN), under the MAGELLAN Project, hosted the 7th Rare Earth Roundtable webinar. The event, titled “Rare Earth Permanent Magnet Applications in the Automotive Sector: Criticality and Circular Economy Challenges,” brought together key stakeholders from automotive supplier ZF , the German Association of the Automotive Industry (VDA) , and research institution IFPEN.
The central theme was the European automotive industry’s critical dependency on China for rare earth permanent magnets (NdFeB), which poses significant geopolitical, supply chain, and sustainability risks.
The Core Challenge: Supply Chain Vulnerability
Speakers highlighted the industry’s deep-seated reliance on Chinese imports. Karol Bednarek of VDA noted that Germany imports 94% of its NdFeB magnets from China. These magnets are essential not only for EV traction motors (using 0.8kg to 4.4kg per vehicle) but also for numerous other components like sensors and power windows. This dependency is complicated by Chinese export controls on magnet technology, which create bureaucratic delays and disruption risks.
From a sustainability perspective, David Schuller of ZF explained that magnets contribute approximately 37% of a typical e-motor’s total Product Carbon Footprint (PCF). However, a significant lack of transparency exists regarding the «green magnet» PCF, with reported values varying widely.
A Multi-Pronged Strategy for Mitigation
The webinar focused on a multifaceted approach to de-risk the supply chain, emphasizing technology, sourcing, and circularity.
- Technological Innovation: Motor design is a crucial enabler for reducing magnet dependency. Both ZF and IFPEN are focused on advanced designs, such as Permanent Magnet-Assisted Synchronous Reluctance (PMaSynRel) motors. Miša Milosavljević of IFPEN demonstrated a rotor that achieved a 25% performance improvement over the state-of-the-art. This optimized design can achieve target performance with 20% less magnet mass.
- Supply Chain Diversification: ZF is actively exploring sourcing magnets from Europe or the USA, but this pathway is currently more expensive and requires clear demand signals from OEMs.
- Circular Economy: The MAGELLAN Project itself aims to establish a European supply chain for magnets that incorporate ~25% recycled rare earth content. However, VDA cautioned that recycling faces economic challenges, especially for small, dispersed magnets in vehicles. Production scrap is the most promising near-term feedstock, with end-of-life vehicle recycling expected to become significant only after 2035.
Conclusion: A Call for Cohesive Action
The consensus was that technological solutions to reduce or even eliminate rare earths already exist. The primary barrier is not technology, but the lack of a strong business case and market pull for these alternatives.
The webinar concluded that a cohesive European strategy is urgently needed. This requires a collaborative effort: OEMs must create demand for sustainable and secure magnets, suppliers must continue to innovate in design and efficiency, and policymakers must provide a stable regulatory environment.
Prepared by: Shariefah Darries – SITES
