Rare-earth-free ferrite magnets gain Japan METI support for automotive motors

Japan’s Ministry of Economy, Trade and Industry has decided to make rare-earth-free ferrite magnets eligible for government support as part of its efforts to ensure a stable supply of permanent magnets used in applications such as automotive motors. The move reflects growing concerns around supply-chain resilience and material security for the automotive and manufacturing sectors.
The ministry will seek public comments until the end of February, with the objective of revising its policy to ensure the stable supply of permanent magnets at the earliest possible stage. This revision is intended to respond to increasing risks associated with global rare earth supply disruptions and market concentration.

Expansion of permanent magnet support policy

Under the existing framework, policy support has focused on strengthening domestic production capacity for neodymium magnets and heavy rare metal-free magnets, while also maintaining production capacity for samarium-cobalt magnets. These materials are critical for high-performance motors and advanced automotive applications. With the latest decision, the ministry will add maintaining production capacity for ferrite magnets as a new policy target. This adjustment acknowledges the strategic importance of ferrite magnets in ensuring supply stability, particularly as manufacturers seek alternatives that reduce reliance on rare earth elements.

Why ferrite magnets matter for automotive motors

Although ferrite magnets offer lower magnetic force compared with rare earth-based magnets, they remain widely used due to their cost advantages and material availability. Their key characteristics include:

• No dependence on rare earth elements

• Lower production costs compared with neodymium-based magnets

• Suitability for general-purpose motors used in automotive parts and household appliances

These attributes make ferrite magnets a practical solution for mass-market automotive components where cost efficiency and supply security are critical.

Global production landscape and supply risks

Ferrite magnets are primarily manufactured in China and Japan, with China holding the largest global share due to its strong cost competitiveness. This concentration has heightened concerns about supply stability, particularly in scenarios involving trade restrictions or geopolitical disruptions. By extending policy support to rare-earth-free ferrite magnets, the ministry aims to mitigate these risks while supporting a more balanced and resilient supply structure for permanent magnets. The revised policy is expected to strengthen the foundation for stable automotive motor production while aligning with broader industrial security objectives.