Tesla's Model 3 Motor May Strain World's Supply of Neodymium

Tesla makes a lot of EV's but Model 3 comes equipped with a neodymium- intensive permanent magnet motor which will put even more strain on the global market for the mineral. Currently, there is almost enough production to meet demand but prices of the element are rising and some analysts worry that demand may seriously outstrip production in as little as a few years.

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The supplies of neodymium are strained because China as a top producer  of this metal has banned an export of it for years. 

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Everyone wants to switch to permanent magnets. Global demand last year was 31,700 tonnes outstripping supply by 3,300 tonnes. Obviously Tesla is not the only one using  it. 

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China continued to export neodymium in 2015 but with strict export quotas on it claiming it wanted to curtail pollution and preserve resources. 

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And it could do it again since it's the main producer and one of the few countries investing in this metal. China is aware of its dominant position here and was using it before. It's just the matter of time when China will do it again.  

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Tesla should follow the example of Toyota which already reduced the amount of neodymium in its motors by about 20%  using other minerals. 

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