Critical Raw Materials Declaration of Independence: Japan Is Searching for Engines Without Rare Earths

Related Vendor

FAULHABER Drive Systems

Japanese manufacturers are seeking ways out of dependency on Chinese rare earths. The focus is on electric motors that require less or no neodymium, dysprosium, and terbium. What initially sounds like material substitution has long since become a strategic issue.

Japanese manufacturers of electric motors are now trying to manage without rare earths. These mostly come from China, which repeatedly becomes an issue due to political tensions. According to the Chinese trade portal Dianzi Jishu Yingyong, supplier Astemo has developed an electric drive that no longer requires neodymium. The rotor in it is made with simple iron.

Mitsuba has also been producing a motor made of iron for three years, which is already installed in the Honda Accord. It is strong enough to operate the windshield wipers. Honda itself, in collaboration with steel manufacturer Daido Steel, developed a magnet without heavy rare earths for the Minivan Freed back in 2016.

These are just a few of many examples from Japan. From the perspective of Japanese companies, efforts to do without rare earths are becoming increasingly important. Relations between Tokyo and Beijing have been strained since the highly conservative Prime Minister Sanae Takaichi suggested in Parliament in November 2025 that her country could intervene militarily in the event of an attack on Taiwan.

For Beijing, this is a highly sensitive issue. Shortly after Takaichi's remarks, China tightened export controls on several "dual-use" goods, including rare earths. Since then, further measures have followed.

Monopoly on Rare Earths and Processed Products

According to figures from the International Energy Agency, China has a global share of around 60 percent in rare earth mining, but more than 90 percent in processing, and almost 95 percent in manufacturing permanent magnets for electric motors. Deliveries of dysprosium and terbium to Japan have reportedly fallen to zero, according to Japanese media reports.

In Europe, the price for dysprosium climbed to 1,750 US dollars per kilogram, approximately 1,600 euros. This represents a 90 percent increase since the end of the year, according to the British agency Argus Media. Understandably, a motor that does not require these rare earths is in high demand. Astemo, a joint venture between Hitachi, Honda, and the Japanese state fund JIC Capital, relies on a synchronous reluctance motor for this purpose.

This motor generates its torque from the differing magnetic permeability of a finely layered iron rotor. This required some technical ingenuity. Ferrite magnets, which are manufactured without rare earth elements, achieve only one-third of the power of a neodymium magnet. A motor using only ferrite would thus have to triple in size. Induction motors and externally excited motors, on the other hand, do not require permanent magnets but instead need so much copper that this raw material could also become scarce.

Series in the 2030s

Astemo circumvents this with a combination. The main motor uses ferrite magnets only for support, delivers 180 kilowatts, and is only about 30 percent larger than a conventional motor with neodymium. A second motor for additional power operates entirely without magnets and activates only when needed, providing up to 135 kilowatts. Together, the two drives achieve a total of 315 kilowatts. According to the company, the serial deployment of such motors would be a world first. It is planned around the year 2030.

Another technological approach is to use rare earths, but significantly less than before. This is the path Nissan is taking. The automaker has reduced the share of heavy rare earths in the motor of the new "Leaf" model by more than 90 percent compared to the first generation from 2010, according to a recent report by the business newspaper Nikkei Asia. This has been achieved primarily through improved heat dissipation, which reduces the need for dysprosium and terbium.

Other electronics manufacturers are also attempting to reduce their production dependency on Chinese rare earths. Since June 2026, Mitsubishi Electric has been dismantling discarded air conditioners as the first company in Japan to recover the magnets from them. "This allows about 35 percent of the rare earths needed to manufacture an air conditioner to be obtained from recycled material," the company stated. Chinese media reports have mocked these efforts, pointing to the high costs of such recycling solutions.

Serious Developments

The Japanese government has made the issue a top priority. Together with France, Tokyo has recently supported a plant of the metal processor Caremag in southern France, which is set to begin operations in early 2027 and later cover one-fifth of Japan's demand for heavy rare earths.

"We share the goal of becoming economically more resilient," said France's President Emmanuel Macron during a visit to Japan in April. The G7 states aim to reduce their dependence on a "single supplier" outside the group to below 60 percent by 2030. Although China was not explicitly mentioned, everyone knows it is that single supplier.

Whether through new motors, recycling, or subsidies for domestic manufacturers: the path to independent supply chains without reliance on rare earths from China is extremely lengthy. What is currently observable in Japan are no more than the first steps along this path.