Threat of Rare Earths Shortages to Hybrids and EVs Remains Unclear
Published December 28, 2011
According to a recently-released Department of Energy report (PDF), several clean energy technologies—including electric, plug-in hybrid and hybrid vehicles—are at risk due to the “critical risk” posed by short-term supply disruptions in the rare earth elements market. The DOE's newly release report, titled "2011 Critical Materials Strategy," outlines several components, including five rare earth metals, that it says will face severe supply challenges in the years that lie ahead.
According to the report, five rare earth metals—dysprosium, terbium, europium, neodymium and yttrium—were found to be in critically low supply in the short term (2012–2015.) These rare earth metals are typically found in magnets used in today's wind turbines, electric and plug-in hybrid vehicles. Supply of other elements, including cerium, indium, lanthanum and tellurium—were found to be near-critical in the short and medium term (2015–2025.)
But lately, the market seems to disagree. Shares of the world's leading rare earths mining companies have plummeted in recent months as demand for the minerals has failed to meet even half of Chinese export quotas. Since China currently dominates international production of rare earth metals, the inability of those quotas to keep up with forecasted demand has long been seen as a threat to hybrid and electric vehicles, whose batteries and motors become more costly as rare earth prices rise.
According to the DOE, the future success of clean, advanced automobiles relies on the availability of several of these rare earth metals and elements. Therefore, it's thought to be essential that supply issues are solved before plug-in vehicle production hits massive levels.
But the importance of minerals like neodymium and lanthanum to producing hybrid and electric vehicles is complicated and often overstated. Tesla's electric vehicles are virtually rare-earth-free, and Toyota is developing motors for its hybrids that eschew the minerals in favor of inductive magnetism. It possible to produce hybrid and electric vehicles without rare earths, but since many major automakers like Toyota have longstanding contracts with spelling out fixed prices for the minerals, it simply hasn't been necessary yet.
Is the department of energy wrong in worrying about short-term disruptions in the rare-earths supply chain creating headaches for some hybrid and electric vehicle makers? Probably not, but in the long term, electric-drive vehicles should be just fine regardless of Chinese export quotas.
20 weeks ago
"Therefore, it's thought to be essential that supply issues are solved before plug-in vehicle production hits massive levels."
While it is essential, plug-in vehicle production won't hit 'massive levels' anytime soon. Plug-in vehicle battery technology is no where near where it needs to be in order to disrupt the current demand of internal combustion engines. A 40-60 mile range on all-electric with a battery that will need to be replaced at a cost of $10K makes for an expensive novelty purchase, at best. Inside of 2-3 years advances being made with internal combustion engine efficiency will even put current battery technology advances back into hibernation.
20 weeks ago
I've already got my hybrid car, so I'm not that worried.
However, I believe the U.S. should start mining some of its own rare earth minerals. Leaving so much of the control to a country whose strategic interests don't necessarily align with ours could be problematic in the future. Mining those minerals now can save us the headache of being forced into a corner later on when we really need them, but have no production or reserve stockpile. The Japanese are currently stockpiling these minerals for just that reason.
20 weeks ago
The Invisible Hand of the Free Market dictates that as long as China is willing to kill their miners to give the world cheap REM, let them. There is no incentive for mining companies to start/restart REM mining in the USA or other places until it is profitable. I am sure some companies have looked into what it will take and at what price point it does become profitable so they are ready.
20 weeks ago
The Invisible Hand of the Free Market can go jack off. The development of EV tech that does not rely on REM is necessary so the world can collectively tell China to [&#@%!] Off.
Hey, Charles, you interested in buying any poisoned milk or lead-based toys? You can get 'em reeeeal cheap from China.
20 weeks ago
Finding cheap, easy to get at, conventional oil is a much bigger problem which may make the above discussions pointless...
MrEnergyCzar
20 weeks ago
@douglas prince, I think the tIHotFM is a stupid, greedy god of the GOP. I have no use for him, except to predict how the sheep CEOs will act.
As for REMs, I think they are strategic. We need to keep at least a small amount of mining going in the USA and a stock pile (something like the Strategic Petroleum Reserve) in case China does to us what they did to Japan.
20 weeks ago
Manganese is a very critical metal. EMM which is produced from manganese is required to produce steel and Aluminum. LMD which is used for Lithium batteries is mostly Manganese. A company in Arizona is planning to go into production of EMM and possibly EMD/LMD in 2014. This is how the US becomes independent of China. The company is American Manganese and the US government should be doing everything they can to encourage companies like this to get into production as quickly as possible.
20 weeks ago
This is why the Hydrogen car is better!
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