Tesla to eliminate rare earths from its next generation electric vehicles

Notorious Tesla chief executive officer Elon Musk has stirred up the electric vehicle (EV) chain again – revealing the company’s next generation vehicles will involve a “complete paradigm change”, including eliminating rare earth elements, and substantially cutting costs.

Perhaps most recently known for his US$44 billion Twitter takeover and shake up, Mr Musk is now back doing what he does best – revamping the EV industry.

At Tesla’s annual investor day, which was livestreamed across the world on Wednesday, Mr Musk called for a total global transition from combustion engine-powered cars to fully autonomous EVs as part of a clear path to a “sustainable energy earth”.

This alone was unsurprising, with most countries across the globe promoting EVs as part of their plans to meet net zero.

To achieve a sustainable energy economy, Mr Musk said around US$10 trillion was needed to be invested in manufacturing.

About 240 Terawatt hours (TWh) of battery storage would be required and development of 30TWh of renewable power.

“Earth can and will move to a sustainable energy economy, and will do so in your lifetime,” he said.

Revamping EVs

Mr Musk noted there are roughly 2 billion cars and trucks operational in the world today.

Tesla is manufacturing about 1.37 million EVs a year, but Musk has ambitiously announced the company is targeting 20 million a year by 2030.

Based on a total cost of ownership per mile basis over five years, Mr Musk says Tesla’s base Model 3 EV is cheaper than a Toyota Corolla, which is the highest selling car in the world.

It is expected Tesla’s next generation EV will be even less expensive. The company is doing this by cutting or innovating processes across the supply chain and manufacturing to enable EVs to be built faster, at a reduced environmental footprint, and cutting out unnecessary procedures, ingredients and costs.

Underpinning the electrification and automating of vehicles are key minerals: nickel, lithium, zinc, copper, cobalt, iron, manganese, aluminium and graphite.

Additionally, rare earths are (or were) essential in building the permanent magnets within EV motors and other renewable or modern technologies.

Next generation electric vehicle

The next generation Tesla EV will be built in Mexico – making it the company’s first factory to be established outside of the US, Germany and China.

Speaking at the investor day was lead of powertrain engineering Colin Campbell who said any battery chemistry would be compatible with the next generation EV model’s powertrain. This would reduce any constraints provided by supply chain issues and fluctuating mineral prices and supply.

He said the next powertrain factory itself will be about 50% smaller than the ones used today, but contain the same capacity – to scale EV production faster.

Removing rare earths

Another key change in the next generation EV will be removal of rare earths in its permanent magnet EV motor.

“As the world transitions to clean energy, the demand for rare earths is really increasing dramatically,” Mr Campbell told the investor day audience.

“Not only is going to be hard to meet that demand, but mining rare earths has environmental and health risks.”

“We have designed our next drive unit, which uses a permanent magnet motor to not use any rare earth materials at all.”

He said the eliminating rare earths will make the next generation EV less reliant on constrained commodities.

Bringing EVs to the masses

It is expected the Tesla’s new EV will be a high demand product and the company is moving quickly over the next couple of years to bring it to the masses.

“We can make lower cost products that are still efficient and compelling, and we can make them at scale,” Mr Campbell said.

EVs will be built more easily in “compact, high output factories”, with the factories themselves easy to establish quickly.

“All of these improvements will be transformative for the adoption of EVs and the company’s ability to scale them,” Mr Campbell added.