Adamas Intelligence expects 10-fold increase in value of rare earths to $36.2B by 2035; growth led by passenger EV traction motors
In 2022, Adamas Intelligence calculated that $3.8 billion worth of magnet rare earth oxides—i.e., NdPr, Dy and Tb oxides—were consumed globally in NdFeB alloys for energy-transition-related applications, including EV traction motors and wind power generators.
The total value of rare earth oxides consumed for the energy transition each year quadrupled between 2020 and 2022. By 2035, with demand and prices expected to continue rising, Adamas projects the value of consumption will increase another 10-fold.
Specifically, from 2022 through 2035, Adamas forecasts that the value of rare earth oxides consumed by energy-transition-related applications will rise at a CAGR of 19.1%, from $3.8 billion in 2022 to $36.2 billion in 2035. This growth will be led primarily by passenger EV traction motors, which will drive more than 50% of the value of consumption in 2035, followed by wind power generators, which will propel another 25%.
Adamas expects NdPr consumption value to see the greatest rise over the forecast period, increasing 11-fold by 2035, underpinned by strong demand growth across all applications, rising prices, and ongoing thrifting of heavy rare earth concentrations in high grade NdFeB magnets and the consequential bolstering of NdPr concentrations.
Adamas expects Dy and Tb oxide consumption value to increase at a slightly slower pace, rising 7- to 9-fold over the forecast period as supply scarcity and technical innovations fuel an incremental reduction in Dy and Tb use per unit of magnet.
Alongside the energy-transition-related applications are a handful of related uses of NdFeB magnets that also stand to benefit from the ongoing shift to electromobility and renewable power generation.
Within each EV are an array of micromotors, sensors and audio speakers that also, in many cases, use NdFeB magnets to minimize vehicle weight, and thereby maximize driving range and/or minimize battery costs. As such, rapidly growing EV sales globally stand not only to boost NdFeB demand for EV traction motors but also for the wealth of smaller applications pervading modern electric vehicles.
Moreover, with ever-increasing focus on energy efficiency, energy costs and related emissions by manufacturers and consumers alike, rare earths and the magnets that use them also stand to benefit from rising demand for efficient and reliable motors, pumps and compressors used in everything from industrial robots and assembly line conveyors to best-in-class white goods, air conditioners, battery powered lawnmowers and more.
The above mentioned ‘tag-along’ applications add billions more to the market outlook and serve as a testament to the importance of the energy transition to rare earths, and of rare earths to the energy transition, Adamas says.