There are scattered deposits of rare earth elements around the world, but China has done quite a bit to corner the market in recent years.
Toyota, which is a worldwide leader in hybrid motor applications, is developing a new hybrid motor that doesn't rely on those rare earth elements. That could lead to significantly cheaper hybrid power sources and reduced costs for wind turbines and other energy generating applications.
The largest seller of Hybrid vehicles is developing an alternative motor for the upcoming electric and hybrid cars that would not require the rare earth metals. The inductive motors to be introduced by Toyota Motor Corporation (NYSE:TM) will be lighter and more efficient that the present magnet-type used in Prius.It would appear that Toyota doesn't want to deal with a tight and restrictive supply of rare earth elements coming out of China and wants to find a cheaper source of materials with which to build its hybrid engines on what will be a growing class of hybrid vehicles under the Prius badge.
Hanson, who is based at Toyota Motor Corporation (NYSE:TM)’s U.S. unit in Torrance, California, said, “It’s a long-term approach. When you’re looking at a geopolitical issue like rare-earth supply, that can lead to developments that create very good solutions.”
The company believes that it is on the verge of a breakthrough although several other companies are working on similar products.
China produces about 95% of the world's supply of neodymium and last summer the country began restricting exports. In December, China announced a 67% increase in export tariffs on the metal and has declared new limits on exports this year.
Neodymium prices have quadrupled in the past year, according to Lynas Corp., an Australian company developing a giant mine and refinery for the material.
Rare earth minerals are a grouping of 17 chemically similar elements that are usually found together in ore and are refined and split apart. They are used in magnets and semiconductors and a host of other technologies. The U.S. and Australia have deposits of them but lack the expertise in extracting and refining the minerals.
For Toyota, getting around this barrier is crucial. The auto maker at this week's Detroit car show announced the expansion of its hybrid-electric lineup by adding two new Prius variants and plans to spread the technology to all of its models in the next decade.