Rare earth price rises do not affect the cost of electric vehicles

First Minmetals Group called on the national rare earth separation enterprises to suspend production. Then the Ministry of Industry and Information Technology issued the “National Special Rectification of Rare Earth Production Order” and decided to carry out a special rectification operation of rare earth production order from August 1 to December 31, 2011.

The repeated news that people have to believe that rare earth prices still have unprecedented room for growth. As early as this time ago, the pressure of such prices was based on "permanent magnet motors" and was transmitted to related industries. New energy vehicles are one of them.

New Energy Automotive Industry's "Autumn Event"

In fact, for some time now, the new energy auto industry has also experienced a “time for trouble”. Recently, many departments have just clarified that non-plug-in type ordinary hybrid vehicles are classified as “energy-saving vehicles”; another media quoted relevant ministries and authorities as saying that the fuel consumption threshold for a subsidy of RMB 3,000 for a small-displacement vehicle will be substantially increased.

In response, brokerage analysts interviewed by the "Securities Daily" reporter said that although China's new energy automobile industry is still in its infancy, it is still time to raise the threshold and guide healthy development. Many policies have been issued. The practical significance lies in cutting down the development path of some redundant constructions and even the waste of resources, and concentrating on the formation of the core competitiveness of China's new energy vehicles."

Rare earth prices are still difficult to affect the cost of new energy vehicles

One side is the "internal concern" mentioned above, and the other side is the "outside concern" understood by public opinion. When the new energy automobile industry will undergo a change due to the “ultimate event”, “rare earth” has been seen by public opinion as “outsiders” that may affect the development of the industry.

The understanding of public opinion is not unreasonable. It stems from the advantage of "permanent magnet motors". It is widely used in the field of new energy vehicles, and all direct-drive permanent magnet motors are inseparable from NdFeB materials.

However, with regard to this speculation, Zhao Xiangrong, a new energy vehicle expert and deputy chief engineer of China Communications Construction and Design Institute of China Communications Construction Group, told the "Securities Daily" reporter that "only permanent magnet motors need to use a large number of NdFeB materials, battery applications Lithium, but lithium does not belong to rare earths. In the cost of pure electric vehicles, it is clear that the battery occupies more than the motor."

Then, given that permanent magnet motors account for a relatively small portion of the cost of new energy vehicles and that the industrialization of new energy vehicles has not yet started, it can be speculated that rare earth prices are still difficult to affect the production costs of new energy vehicles.