The gleaming electric motors rolling off the production line at a factory in northeastern England offer an answer to one of the energy transition’s thorniest challenges. The Advanced Electric Machines (AEM) plant outside Newcastle is at the forefront of building a new generation of motors made without rare earths, a group of 17 nearly indistinguishable metals used to manufacture most of the high-performance permanent magnets that power electric vehicles. CEO James Widmer, a former aerospace engineer who founded the company in 2017, compares heavy reliance on rare earths in EV motors to the ill-fated decision to add lead to gasoline to resolve a technical issue. ‘Putting rare earths in motors is the same thing,’ Widmer told Climate Home News in a video call from his office. ‘You don’t need it, but somebody did it because it was easy.’ Widmer’s firm is among a handful of startup companies working with researchers to eliminate the need for rare earths in magnets and motors – offering a pathway to ease pressure on new mining and refining for one of the world’s most concentrated value chains. Unease over China’s grip on supplies As countries strive to reduce their climate-warming emissions by switching to electric transportation, demand for rare earths is soaring. That is increasing pressure for mining new resources and raising concerns about China’s supply chain domination. China controls more than 90% of global rare earth separation and refining capacity and makes nearly all of the world’s permanent magnets – one of the building blocks of advanced technologies from EV motors and wind turbines vital to the energy transition to microchips, AI data centres and fighter jets. An employee assembling a motor at AEM’s factory outside Newcastle (Photo: Advanced Electric Machines) Beijing spooked Western governments last year when it announced new export restrictions on supplies of rare earths and technological know-how in response to US tariffs on imports of Chinese goods. Automakers were left facing shortages. While some of Beijing’s retaliatory curbs were suspended within months, China’s willingness to use its industrial clout over technological chokepoints to advance its geopolitical objectives has injected momentum into the efforts of companies such as AEM to find alternatives to rare earths. ‘The best way to avoid the problems with these materials…isn’t to drill, baby, drill.The best way is just not to use them in the first place,’ said Widmer. Cutting that dependency would help shrink the environmental footprint of EV motors by keeping costly-to-extract rare earths in the ground, Widmer said. Rare earth-free motors? The auto industry had already been manufacturing electric motors using rare earth magnets for 20 years when Widmer set up AEM after conducting PhD research at the University of Newcastle. Toyota’s Prius model, which is widely recognised as the first mass-produced hybrid passenger car, was launched in 1997 and used rare earth magnets in its motor. About 80% of modern EV drivetrains now rely on high-performance rare earth permanent magnets to convert electricity into torque, according to a 2024 study, fuelling demand for the metals as EV adoption gains traction across the world, from Europe to South Asia. Rapid electrification has doubled demand for magnet rare earths since 2015 and it is projected to increase by another 30% by 2030, according to the International Energy Agency (IEA). It recently put the cost of adequately diversifying the supply chain at $60 billion over the next decade. Demand for EVs and concerns over oil dependence have rocketed back onto the political agenda after the Iran war sparked unprecedented disruptions to global oil markets, reigniting simmering debates about supply chain sovereignty for energy. James Widmer CEO of AEM, at the company’s factory outside Newcastle (Photo: Advanced Electric Machines) Contrary to their name, rare earths are found nearly everywhere on the planet in small quantities. However, larger, economically viable deposits are difficult to find and costly to extract. On top of the expense, getting rare earths out of the ground is energy-intensive and generates toxic waste and sometimes radioactive by-products. This has led to large-scale environmental damage in China and Myanmar, where unregulated mines have become a major source of rare earth elements and are driving environmental destruction and violence, according to NGOs. Lighter, greener, less risky Instead of rare earth magnets, AEM’s motors rely on electrical steel laminations – thin stacked sheets of specialised metal – that create a magnetic field when powered. The company says its electric motors are more energy-efficient and, in some configurations, more power-dense than traditional rare earth motors and reduce the emissions and polluting waste associated with permanent magnet motor manufacturing processes. ‘And we’ve gotten rid of this enormous liability in the supply chain at the same time,’ Widmer said. Mar 6, 2026 Clean Energy Frontier South African rare earths project aims to rival Chinese with low-cost model The EU-backed Zandkopsdrift project plans to offset the high cost of rare earths production with another mineral in hot demand for use in batteries Read more Apr 2, 2026 News Nepal’s EV revolution pays off as oil crisis causes pain at the pumps Import subsidies, abundant hydropower and charging investments have spurred EV adoption, with electric vehicles now making up about three-quarters of new car sales Read more May 29, 2025 Energy Cobalt and nickel-free electric car batteries boom in ‘good news’ for rainforests Lithium iron phosphate batteries do not contain cobalt and nickel, which are mostly found in rainforest nations like the DR Congo and Indonesia Read more The company, which manufactures electric motors for passenger cars and trucks as well as for the agricultural and aerospace sectors, expects demand for its technology to grow as buyers become increasingly aware of the risks of supply chain disruption and the environmental harm caused by rare earth mining. AEM’s motors are already being used in commercial vehicles, for example in truck axles in the Netherlands, and the company aims to expand into new regions through a joint venture with Indian manufacturing firm Sterling Tools, a company spokesperson said. An employee working on a AEM rare earth-free motor in the company’s factory outside Newcastle (Photo: Advanced Electric Machines) ‘Reinventing the wheel’ Some 8,000 kilometres from AEM’s factory floor, a group of Silicon Valley engineers has been inundated with enquiries since Beijing announced its export restrictions on technologies to mine and smelt rare earths, magnet production and recycling. As manufacturers worried about shortages, the rare earths supply chain bottleneck became a board-level conversation and executives started scouting for alternatives, said Ankit Somani, a former Google engineer and the co-founder of Conifer. ‘Every startup needs an unfair advantage – and that was ours,’ he told Climate Home News, adding that the challenge is now to keep up with demand. The San Francisco-based startup’s technology removes rare earths from electric scooters and small delivery vehicles by placing the motor directly inside the wheel hub, an innovation it describes as ‘literally reinventing the wheel’. Ankit Somani speaking to employees at Conifer’s research and development facility in Sunnyvale, California (Photo: Conifer) To transfer power inside vehicles, the company uses a refined form of iron oxide – the same basic compound as rust – known as a ferrite magnet. Somani said the technology reduces the costs of manufacturing electric vehicles by eliminating the need for expensive rare earth supplies. Conifer’s first production line already produces 75,000 motor components a year in the city of Pune in western India, the hub of its manufacturing operations, where electric two- and three-wheelers are booming. To keep up with demand, the company is planning to open a 250,000-unit capacity facility, Somani said. The next generation of magnets At Minnesota-based Niron Magnetics, which produces permanent magnets using iron nitride instead of rare earths, vice president Tom Grainger said last year’s supply chain disruption had been a wake-up call. ‘What was always possible but never quite material – the risk of geopolitical interference in magnet supply chains – became real in 2025,’ he told Climate Home News. In contrast to magnets that depend on Chinese rare earth supplies, the company’s iron nitride magnets are made from the abundant and inexpensive elements, iron and nitrogen. Niron estimates that iron nitride magnets could replace roughly two-thirds of the global permanent magnet market. Feb 25, 2026 Clean Energy Frontier Battery passport plan aims to clean up the industry powering clean energy Some of the world’s largest battery makers are piloting a scheme led by the Global Battery Alliance to reward manufacturers that meet social and environmental standards Read more Mar 26, 2026 Clean Energy Frontier Dutch startup’s rust-powered batteries could help crack Europe’s energy storage gap Ore Energy says its long-duration batteries made of iron and air can help Europe cut its dependence on critical minerals supply chains and boost renewables Read more Nov 3, 2025 Clean Energy Frontier Self-taught mechanics give second life to Jordan’s glut of spent EV batteries As EV sales boom in Jordan, a lack of formal infrastructure for dealing with end-of-life batteries is leading to some innovative solutions Read more Niron Magnetics’ first consumer-facing magnet, used in a professional loudspeaker, was rolled out earlier this year and the firm has already received investment from automotive giants General Motors, Stellantis and parts provider Magna International. The company is developing its first full-scale manufacturing plant in Sartell, Minnesota, which aims to produce up to 1,500 tonnes of magnets annually when it opens in 2027, targeting consumer electronics, as well as the automobile sector, data-centre cooling pumps, robotics and drones. By Chinese standards, that is a modest start: a typical factory in China can produce between 5,000 and 20,000 tonnes of rare earth magnets, said Grainger. But Niron’s model is designed to be replicated anywhere with basic industrial infrastructure. Unlike rare earth processing, it requires no proximity to a mine or complex chemical permitting. ‘The goal…is a factory that has the scale to deliver in sufficient quantities for large programmes – with the economics that come with scale,’ Grainger said. The firm is already looking for a second site in the US to build a 10,000-tonne per year facility, equivalent to approximately 1-2% of the global permanent magnet market share, according to the company. Governments ramp up support Anxious to protect their industries from potential supply gaps, Western countries are supporting research into innovative rare earth alternatives. Jean-Michel Lamarre, a team leader at Canada’s National Research Council, said the government’s science agency, which has been developing rare earth-free motor technologies, is working on using 3D printing to produce magnets. Lamarre said that while removing rare earths from electric motors significantly reduces the costs of materials, making new designs commercially viable remains a challenge. Difficulties include scaling up manufacturing capability and responding to rapidly changing market conditions, a spokesperson for Canada’s Department of Natural Resources said. Conifer’s motor assembly plant in Pune, India (Photo: Conifer) The US, Canada and the European Union have announced billions in subsidies and financial support to mine and produce more of the materials themselves, as well as funding research on rare earths substitutes. The US government is also investing heavily in American rare earths and magnet producers. Recycling rare earth elements from discarded computers, motors and wind turbines also has a role to play in boosting domestic production, said Nicola Morley, a professor of materials physics at the University of Sheffield in the UK, who advises major manufacturers including Siemens and Volkswagen. Recycling alone has the potential to reduce the need for primary rare earths supplies by up to 35% by 2050, according to the IEA. Today, around 1% of the rare earths used in end-products is recycled because of technical and economic challenges. But startups are seizing on interest in creating circular supply chains that reduce reliance on China. Better than rare earths While recycling may be a relatively quick way for major markets to bolster their supplies of magnet metals, some researchers expect scientists to come up with groundbreaking alternatives to rival rare earths within a matter of years. At Georgetown University in Washington DC, physicist Kai Liu and his team are working to create new materials for magnet production using a machine that bombards atoms of up to six different metals onto a surface simultaneously – like six games of pool played at once. As they land, the atoms bond into new crystal structures, which Liu’s team tests for magnetic properties. Their research has already led to a discovery of magnet materials, Liu said, adding that he is hopeful for further breakthroughs by the scientific community. ‘I am cautiously optimistic that within the next five to 10 years, the community might find something comparable or better than rare earths,’ he said. Main image: An employee working on an AEM motor at the company’s factory outside Newcastle (Photo: Advanced Electric Machines) The post The energy transition has a rare earth problem: These startups are solving it appeared first on Climate Home News.