GM ends EV magnet supply deal with VAK
General Motors has canceled its contract with the American factory owned by VAK to supply permanent magnets for electric vehicles, leading to the initiation of legal arbitration proceedings between the two parties. This decision comes amidst the challenges faced by Western companies in building local supply chains for rare earth elements, especially given China's control over approximately 90% of the global production of these magnets. The German factory in South Carolina, which was designated to supply 90% of its output to GM for no less than ten years, was established at a cost of $500 million, with an annual production capacity of up to 2,000 metric tons. The dispute has been referred to confidential arbitration after the contract was canceled last July, coinciding with Energy Fuels’ acquisition of VAK for $1.9 billion. This happened alongside a decline in GM’s plans for electric vehicle production and losses amounting to $6 billion earlier this year, due to regulatory changes and cost pressures, as the automotive industry seeks to strengthen local supply chains and reduce reliance on China.
Notice: This Is an AI-Generated Summary
Comments (0)