Permanent Magnet for EV Market Size, Share & Industry Analysis, By Vehicle Type (Passenger Car, Two and Three Wheelers, and Others), By Propulsion Type (Battery Electric Vehicles, Plug-in-hybrid Electric Vehicles, Hybrid Electric Vehicles, and Fuel Cell Electric Vehicles), By Application (Traction Motors, Power Steering Systems, Braking Systems, Battery Management and Cooling Systems, Charging Systems, and Others), and Regional Forecast, 2026-2034

The permanent magnet for EV market is anticipated to rise substantially in the coming years. Permanent magnets, especially neodymium-iron-boron (NdFeB) magnets, play a crucial role in electric vehicles (EVs), particularly in traction motors. These magnets are widely used in permanent magnet synchronous motors (PMSMs) due to their high magnetic strength, compact size, high efficiency, and excellent heat resistance. These characteristics make them ideal for delivering high torque and power density in EV drivetrains, improving overall vehicle performance and battery efficiency.

In July 2025, Toronto-based Neo Performance Materials obtained a further contract to provide permanent rare earth magnets to a major European manufacturer of EV traction motors. Although the precise volume and price information were kept under wraps, the magnets will be manufactured at Neo's recently opened facility in Narva, Estonia.

Permanent Magnet for EV Market Driver

Rising Adoption of Electric Vehicles to Drive Market Growth

The rapid adoption of electric vehicles (EVs) is a major driver of growth in the permanent magnet market, especially for high-performance magnets such as neodymium-iron-boron (NdFeB). These magnets are essential components in EV traction motors due to their superior magnetic strength, efficiency, and compactness. As global demand for EVs surges, driven by environmental concerns, government incentives, and emission regulations, the need for efficient, lightweight, and durable motor systems is increasing. This directly fuels the demand for permanent magnets, positioning them as a critical material in the expanding EV ecosystem.

In 2020, 77% of the worldwide electric vehicle market utilized permanent magnet motors. Industry experts anticipate that since China has emerged as one of the biggest markets for electric vehicles and has significant control over the supply of rare earth materials, it is improbable that the country will transition away from permanent magnet machines.

Permanent Magnet Market Restraint

High Material Costs and Price Volatility to Restrain Market Growth

The growth of the permanent magnet market for electric vehicles is being restrained by the high cost and price volatility of rare earth materials such as neodymium, praseodymium, and dysprosium. These elements are critical to manufacturing high-performance magnets used in EV motors, but their limited global supply and geopolitical concentration, especially in China, create instability in pricing. Fluctuating costs make long-term planning and procurement challenging for EV manufacturers, potentially driving them to explore alternative motor technologies that do not rely on rare earth magnets.

Permanent Magnet Market Opportunity

Expansion in Emerging Markets to Drive Market Opportunity

The rapid expansion of electric vehicle (EV) adoption in emerging markets such as India, Southeast Asia, Latin America, and Africa is expected to drive the demand for permanent magnets significantly. As governments in these regions invest in EV infrastructure, provide incentives for clean mobility, and promote domestic manufacturing, the need for efficient and compact traction motors is rising. Permanent magnets, particularly NdFeB types, are essential for meeting these performance requirements. Additionally, the growing presence of EV manufacturers and battery producers in these markets is creating new growth opportunities for permanent magnet suppliers.

Key Insights

The report covers the following key insights:

• Recent Advancements in Permanent Magnet for the EV Market
• Key Industry Trends
• Regulatory Landscape for Permanent Magnet for the EV Market
• Key Industry Developments (Mergers, Acquisitions, and Partnerships)
• Impact of COVID-19 on the Permanent Magnet for EV Market

Segmentation

Analysis By Vehicle Type

Based on vehicle type, the market is divided into passenger car, two and three wheelers, and others. Passenger cars are the dominant segment. Permanent magnets for EVs offer better torque density, energy efficiency, and compact size, ideal for passenger EVs, which prioritize range and performance within limited space, drives segment growth.

Two and three wheelers are the fastest-growing segment in the market due to the rising demand for economical vehicles in the developing countries. In India, more than 90% of EVs on the road are two and three wheelers, making up about 56% of that segment in 2024, meaning every second three wheelers sold was electric.

Analysis By Propulsion Type

Based on propulsion type, the market is divided into battery electric vehicles, plug-in-hybrid electric vehicles, hybrid electric vehicles, and fuel cell electric vehicles. Battery Electric Vehicles (BEVs) are the dominant segment in the permanent magnet for EV market due to their complete reliance on electric traction systems powered by high-efficiency motors. BEVs widely use Permanent Magnet Synchronous Motors (PMSMs) that incorporate neodymium-based magnets to deliver high torque, compact size, and improved energy efficiency, crucial for maximizing battery range.

Hybrid electric vehicles also hold a remarkable share in the permanent magnet for the EV market. Permanent magnet synchronous motors provide high torque density, excellent efficiency, and compact packaging ideal for electric vehicle components in the hybrid drives segment growth.

Analysis By Application

Based on application, the market is divided into traction motors, power steering systems, braking systems, battery management and cooling systems, charging systems, and others. Traction motors are the dominating segment in the market as they are the primary application of permanent magnets in electric vehicles. These motors, especially Permanent Magnet Synchronous Motors (PMSMs), rely heavily on rare earth magnets such as neodymium and dysprosium to deliver high torque, power density, and efficiency, all critical for EV performance.

The braking systems segment is witnessing strong growth in the permanent magnet for the EV market due to the integration of regenerative braking systems, which heavily rely on permanent magnet motors.

Regional Analysis

By region, the market is divided into North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.

North America has a significant share of the permanent magnet for EVs. The permanent magnet market for EVs in North America is experiencing steady growth, driven by the region’s expanding electric vehicle industry, supportive government policies, and strategic investments in domestic rare earth supply chains. Major automakers such as Tesla, GM, Ford, and Rivian are ramping up EV manufacturing, boosting demand for NdFeB permanent magnets used in EV traction motors.

Asia Pacific is the fastest-growing region in the market. The Asia Pacific permanent magnet for the EV market is experiencing strong growth due to the region’s dominant position in electric vehicle production, rare earth mining, and magnet manufacturing.

Key Players Covered

The global permanent magnet market for the EV market is fragmented in terms of the number of providers. Various market initiatives and R&D activities are anticipated to drive market growth. In November 2024, MP Materials Corp. said that Fort Worth, Texas, will host its first manufacturing facility for rare earth (RE) metals, alloys, and magnets. The business also stated that it has reached a binding long-term agreement with General Motors to provide rare earth materials, alloys, and finished magnets that are made and sourced in the U.S. for electric motors in over a dozen models utilizing GM's Ultium platform, with production gradually increasing from 2023.UPM Biofuels (Finland)

• Neste (Finland) 
• China Northern Rare Earth Group (CHINALCO/NREMC) (China)
• Beijing Zhong Ke San Huan Hi-Tech Co., Ltd. (China)
• Shin-Etsu Chemical Co., Ltd. (Japan)
• Hitachi Metals (Now part of Proterial Ltd.) (Japan)
• MP Materials (U.S.)
• Lynas Rare Earths Ltd. (Australia)
• VACUUMSCHMELZE (VAC) (Germany)
• Urban Mining Company (U.S.)
• Zhong Ke Magnetic Industry (China)
• Advanced Technology & Materials Co., Ltd. (AT&M) (China)
• General Motors (U.S.)
• Toyota (Japan)

Key Industry Developments

• In July 2025, China Northern Rare Earth is predicted to improve significantly, between 1,882.54% and 2,014.71%, which will support the shares of rare earth permanent magnets concept stocks, combined with the sustained high and steady performance of spot rare earth prices and the positive outlook held by many market players for the future of rare earths.
• In December 2021, General Motors made yet another significant advance. GM and VAC of Germany unveiled plans for VAC to construct a facility in the U.S. that will produce permanent magnets for the electric motors utilized in the GMC HUMMER EV, Cadillac LYRIQ, Chevrolet Silverado EV, and more than a dozen other models built on GM's Ultium Platform. The new facility intends to employ raw resources obtained locally.