The company announced Thursday that it had signed a deal to supply rare earth metals to MP Materials and finished magnets to the motors built at a new Fort Worth factory, Texas. Construction is expected to begin in 2023.
It is also in negotiations with Vacuumschmelze (VAC), Germany, to establish a U.S. plant to produce electric vehicle motor magnets. According to the companies, production will begin in 2024 and "hundreds" of jobs will be created.
The financial terms of these deals were not disclosed by the companies. GM's Head of Purchase and Supply Chain, Shilpan Amin, stated that it has a parts supply arrangement with MP Materials, with no GM capital investment. Although the capital structure for the venture with VAC remains to be determined, the companies stated that they would jointly build a plant.
Amin stated that there are currently no American factories capable of producing large quantities of electric vehicle magnets. MP stated that 90% of the current supply comes from China.
These moves are made as automakers try to arrange parts supplies in preparation for the expected shift from internal combustion engines to electric power. GM has a goal to sell only electric passenger cars by 2035. LMC Automotive Consulting firm predicts that the U.S. will see nearly 400,000 new fully-electric vehicles this year. This is almost twice last year's figure. They still represent only 2.6% of all sales. The firm anticipates that sales will grow to more 730,000 next year, and to more than 2,000,000 by 2025. Even at 2,000,000, EV sales would still only account for 12% of U.S. vehicle sales.
Amin stated that MP Materials could supply magnets to support 500,000 EV-motors annually. The company stated that the two deals together will provide all of GM's magnet requirements at least in the short term.
MP stated that engineering and design work are ongoing on the new plant, which covers 200,000 square feet. It will employ more than 100 people. According to the company, the factory's products will also be sold in defense, electronic, and clean energy markets.