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Why Rare Earths Are Critical to EV Motors
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Key Takeaways
- In 2024, rare earth demand from EV motors reached 37 kt, up 32% year-over-year.
- The bulk of rare earth demand from EV motors is driven by three elements: neodymium, dysprosium, and terbium.
Electric vehicles are reshaping the demand landscape for rare earth elements. As EV sales surge worldwide, the motors that power them are becoming one of the fastest-growing sources of demand for rare earth magnets. In 2024, demand tied to EV motors reached 37 kilotons, and is expected to rise to 43 kt in 2025.
The data for this visualization comes from Benchmark Mineral Intelligence as of August 2025.
How Rare Earths Power EV Motors
There are four main types of EV motors: Permanent Magnet Synchronous Motors (PMSMs), Induction Motors, Electrically Excited Synchronous Motors, and Axial Flux Motors.
Only PMSMs and Axial Flux Motors rely on rare earth permanent magnets, but together they made up over 86% of the EV motor market in 2024.
| Year | PMSM | Induction | EESM | Axial Flux | Total EV Motors |
|---|---|---|---|---|---|
| 2022 | 11.6M | 1.8M | 310K | 3K | 13.7M |
| 2023 | 15.6M | 2.2M | 557K | 4K | 18.3M |
| 2024 | 19.7M | 2.5M | 662K | 4K | 22.9M |
| 2025F | 24.1M | 3.1M | 915K | 27K | 28.1M |
The most widely used magnets are NdFeB (neodymium-iron-boron) magnets. To withstand high operating temperatures, these magnets are often enhanced with dysprosium and terbium.
| Year | Rare Earth Demand (kt) |
|---|---|
| 2022 | 19 kt |
| 2023 | 28 kt |
| 2024 | 37 kt |
| 2025P | 43 kt |
PMSMs Remain the Dominant Technology
Permanent Magnet Synchronous Motors have become the global industry standard thanks to their efficiency, high torque output, and compact design. By comparison, induction motors are less efficient and bulkier, which makes them less attractive for large-scale EV deployment.
Despite some automakers experimenting with magnet-free designs to reduce reliance on rare earths, PMSMs continue to capture almost two-thirds of the EV motor market.
Future Demand Outlook
As EV adoption accelerates, rare earth demand from motors is expected to grow steadily. Even as new technologies aim to reduce magnet content or use alternative materials, the efficiency advantages of PMSMs ensure that demand for neodymium, dysprosium, and terbium will remain strong.
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