The electric vehicle (EV) market continues to grow; however, its growth has slowed significantly in Europe and the US in the first half of 2024. A pivotal route to reinvigorating growth will be releasing models in a more affordable price range. To this end, there are many avenues to reduce the cost of an EV. While the battery rightly takes focus, other components throughout the vehicle, such as the electric motor, can also reduce costs.
IDTechEx’s latest report, “Electric Motors for Electric Vehicles 2025-2035: Technologies, Materials, Markets, and Forecasts”, analyses the current technology and materials landscape for electric motors in EVs and forecasts the future trends and demands for the next ten years.
IDTechEx forecasts that over 160 million electric motors will be required for the EV market in 2035, and approximately 30% of the automotive market will use rare earth-free technologies in the same year.
Improving Performance to Reduce Battery Demands
The first way a motor can reduce vehicle cost is through driving efficiency. Vehicles are generally designed to maximize range on test cycles (such as WLTP or CLTC) and in real-world driving scenarios. The more efficient a motor is, the more range can be obtained from the same battery capacity.
For example, if a motor has an efficiency of 96% rather than 93%, this could decrease the energy needed for a 75kWh vehicle by around 2.9% to achieve the same range. In turn, this reduces the battery cost by the same amount; for a 75kWh car with a battery cost of around US$100/kWh, we could see a reduction in battery price per vehicle of around US$200.
Materials vs Manufacturing Costs in the Motor
According to IDTechEx, permanent magnet (PM) motors will dominate the EV market in 2023, with an 85% share in battery electric and plug-in hybrid cars. The permanent magnets used in these motors contain rare earths and can be very costly.
Despite being a relatively small part of the motor, they often take up around a third of its bill of materials. The historic price of these rare earths has also been very volatile; since 2010, the maximum cost of neodymium has been nearly five times higher than its minimum.
Other magnet-free motors, such as wound rotor synchronous motors (WRSM, sometimes called externally excited synchronous motors, EESM), have a lower cost of materials due to replacing permanent magnets with copper windings.
However, these are more expensive to manufacture, with winding required on the rotor, a mechanism for providing a current to the rotor, and the associated control electronics. Their efficiency is typically lower on the WLTP cycle, although it is often better for high-speed cruising. To offset the manufacturing costs and efficiency loss, the price of PM materials would have to be high to make a WRSM motor directly competitive on system cost.
Rare earth-free magnets are another future solution; these magnetic materials are much less costly but sacrifice performance. Rare earth-free magnets such as ferrites or AlNiCo can be competitive with Nd magnets in specific magnetic properties but not across all the essential properties.
The upshot is that more magnetic material is required, sacrificing power density and requiring a larger motor for the same performance. This approach could be taken to produce a low-cost vehicle; a much lower-performance motor could be installed and still be sufficient for a small city car. However, due to these magnets’ significant performance deficit, the rotor’s manufacturing costs can be increased to pack enough magnetic material.
The takeaway is that alternatives to rare earth permanent magnet motors will only be cost-competitive when rare earth magnet prices are high. Other reasons to switch away from rare earths include environmental friendliness and supply chain security.
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