China’s Rare Earth Price Surge Pressures GM’s EV Margins
China’s dysprosium prices rebounded to $240–250/kg in March after collapsing in 2024, while neodymium climbed back to $130–150/kg and ex-China neodymium trades near $220/kg. GM’s EV traction motors, built on NdFeB magnets, face rising costs and supply risks as China controls over 90% of heavy rare earth alloy production.
1. Rare Earth Price Trends
Dysprosium prices surged above $500/kg in 2023 before plummeting below $60/kg mid-2024 and recovering to $240–250/kg in March; neodymium similarly fell from over $200/kg in 2022 to $60–70/kg by mid-2024 and has since climbed to $130–150/kg in China with external prices near $220/kg. Terbium remains the scarcest heavy rare earth, trading around $1,000–1,100/kg domestically and exceeding $3,600–4,000/kg outside China.
2. Implications for GM’s EV Business
GM’s electric vehicle traction motors rely on NdFeB permanent magnets containing dysprosium and terbium, exposing the automaker to rising input costs and supply shortages as over 90% of heavy rare earth alloy production is based in China. Without alternative metallization sources, GM could face margin compression and potential delays in EV rollouts as demand for permanent magnets intensifies.