General Motors Signs Rare Earth Supply Agreement With United States Domestic Suppliers

According to foreign media reports, General Motors has recently signed an agreement with Noveon Magnetics, a Texas-based rare earth magnet materials company, to procure rare earth magnets for its full-size pickups and SUVs. This is the third domestic rare earth supply contract signed by General Motors.

General Motors stated that the latest agreement, along with two other agreements (signed with MP Materials, a rare earth materials company based in Las Vegas, and E-Vac Magnetics, a South Carolina subsidiary of German magnet alloy manufacturer Vacuumschmelze GmbH), will enable GM to source most of its rare earth magnets directly from domestic suppliers in the United States. However, many of the automotive components currently sourced by the company still rely on magnets made in China.

Image Source: General Motors

The rare earth supply agreement between General Motors and Noveon Magnetics demonstrates GM's strategic intention to build a diversified supply chain and mitigate risks arising from U.S.-China trade tensions.

A spokesperson for General Motors stated, "This collaboration is a key step for the company in building a resilient supply chain for critical components. By working with domestic suppliers in the United States, we can not only ensure our own production needs but also contribute to the enhancement of American manufacturing capabilities."

Previously, in response to the US tariff threats, the Chinese government imposed export controls on rare earth magnets. In June this year, Ford Motor Company was forced to temporarily halt production at some of its factories due to a shortage of magnet supplies.

Although China relaxed these restrictions after reaching a trade agreement with the Trump administration, the U.S. government continues to promote expanding domestic production to reduce dependence on Chinese rare earth materials, including allowing the U.S. Department of Defense to acquire a stake in MP Materials.

During the Biden administration in 2021, General Motors began cooperating with MP Materials with the aim of establishing a domestic rare earth magnet supply chain in the United States. Rare earth magnets are crucial for internal combustion engines, electric vehicle motors, and other key components.

According to General Motors, MP Materials and E-Vac Magnetics are expected to start producing rare earth magnets for the company next year, while Noveon Magnetics is already producing rare earth magnets and began delivering products to General Motors last month.