General Motors terminated a long-term supply agreement with e-VAC Magnetics, a U.S. factory planned to produce rare-earth magnets for GM’s electric vehicles. The cancellation took effect July 1, and e-VAC has initiated arbitration seeking damages. Neither company has commented on the reason for the termination.
The dispute affects a key part of the U.S. domestic EV supply chain. The $500 million plant in South Carolina is owned by Germany’s Vacuumschmelze (VAC). It was expected to allocate about 90% of its capacity to GM. The cancellation also adds uncertainty to Energy Fuels’ planned acquisition of VAC.
GM is pursuing other sources for its EV magnets. It has a long-term partnership with MP Materials to source and manufacture magnets in the U.S. GM has also invested in Niron Magnetics, which is developing rare-earth-free magnet technology.