February 2025: Innovation and Geopolitics of Rare Earths in the Electric Motor Industry

We are pleased to continue our monthly series dedicated to the European Green Deal and its implications for the electric motor industry. This February, alongside an analysis of key regulatory and industrial updates, we focus on a topic of growing importance: the availability of rare earth elements and their impact on industrial applications, particularly in high-efficiency electric motors.

Clean Industrial Deal: New Incentives for Industrial Transition

On February 26, 2025, the European Commission introduced the “Clean Industrial Deal”, a plan aimed at supporting European industries in their transition towards climate neutrality while enhancing their competitiveness. With a €100 billion investment, the plan focuses on:

• Simplifying state aid regulations to encourage decarbonization projects.
• Reducing energy costs for energy-intensive industries, particularly benefiting small and medium-sized enterprises (SMEs).
• Establishing a “Bank for Industrial Decarbonization” to support research and development of more efficient technologies for the European industry.

These measures could benefit the electric motor production sector, fostering the adoption of new technological solutions that improve efficiency and reduce dependence on critical materials.

Rare Earths and Geopolitics: The Donbass Case

In recent months, rare earths have become a central topic in industrial and geopolitical debates. Recent studies confirm that Ukraine, particularly the Donbass region, possesses significant rare earth deposits, which could reshape global supply chain dynamics.

Currently, the U.S. administration and the Ukrainian government are discussing potential agreements for the extraction and commercialization of these resources. If an alternative supply chain emerges, challenging China’s dominance in rare earth refining, it could profoundly impact the electric motor market, which heavily relies on permanent magnets containing neodymium, dysprosium, and terbium. However, the geopolitical complexity of the region raises uncertainty about the timing and feasibility of exploiting these deposits.

Technological Alternatives to Permanent Magnets

As the global market grapples with the future of rare earths, scientific and engineering research is advancing alternative solutions for electric motor production. Our company, specialized in rotor manufacturing, has long been exploring strategies to reduce dependency on permanent magnets. Two Key Approaches Are Emerging:

• Optimization of Induction Rotors - by enhancing rotor geometries and lamination sections, it is possible to improve the efficiency of electric motors without relying on permanent magnets. Squirrel cage rotors, made from aluminum or copper, offer a viable alternative for high-performance industrial applications.
• Development of New Materials - research on alternative magnetic materials and high-efficiency alloys could lead to innovative solutions that provide high performance while minimizing rare earth usage.

February 2025 marks a pivotal moment for energy transition and electric mobility. On one hand, Europe is investing in industrial policies aimed at strengthening the sustainability and competitiveness of the sector. On the other, geopolitical developments in Ukraine could reshape the supply of critical materials for the electric motor industry.

In this rapidly evolving landscape, our company remains committed to research and development, focusing on technological solutions that ensure both efficiency and sustainability. We will closely follow global developments to anticipate market shifts and drive innovation in response to new industry challenges.