Tesla has put rare-earth-free EV motors back in the spotlight.

At its September 2026 Cybercab event, Tesla showed a new rare-earth-free Cybercab motor that it says is 18% smaller and 25% lighter than comparable high-performance drive units, with improved efficiency. Elon Musk later said the motor contains no rare-earth metals.

Rare-earth-free motors are not new. Induction motors and electrically excited synchronous motors have been used for years. The harder part is matching the compact size and performance of permanent-magnet motors without relying on rare-earth magnets.

Tesla has not disclosed the magnetic material or detailed architecture used in the Cybercab motor.

For motor manufacturers, that leaves a more practical question: if the magnet system changes, what happens to the rest of the magnetic circuit, including the electrical steel core?

What Tesla Actually Announced

Tesla has used several motor technologies over the years.

Earlier vehicles relied heavily on AC induction motors, which do not require permanent magnets in the rotor. With the Model 3, Tesla moved toward permanent-magnet motor technology, largely for efficiency and power density.

In 2023, Tesla said its next-generation drive unit would reduce its dependence on rare-earth materials.

The Cybercab unit shown in September 2026 appears to continue that direction.

Tesla says it is:

18% smaller
25% lighter
more efficient than comparable high-performance drive units
free of rare-earth metals, according to Elon Musk

The magnetic material has not been disclosed, so it is still unclear how Tesla achieved the design.

Why Rare Earths Matter in EV Motors

Rare-earth elements such as neodymium, dysprosium and terbium are widely used in NdFeB permanent magnets.

Their main advantage is strong magnetic performance in a compact package. That helps permanent-magnet motors achieve high torque and efficiency without becoming too large.

Removing those magnets can affect motor size, rotor design, cooling and high-speed performance.

So the change is rarely limited to one material.

Why Automakers Are Looking for Alternatives

Supply is part of the reason.

According to the International Energy Agency, China accounted for 91% of global refined magnet rare-earth output and 94% of sintered permanent-magnet production in 2024. That concentration has made supply resilience an increasingly important issue for automakers.

But any alternative still has to meet the same basic requirements for efficiency, power density, durability and cost.

Rare-Earth-Free Does Not Mean Less Dependence on Magnetic Materials

The stator — and in many designs the rotor — still depends on non-oriented electrical steel laminations to carry magnetic flux and limit losses.

A different rotor design can change flux distribution, electrical frequency and heat generation. That can also change what engineers need from the steel.

For EV traction motors, magnet design and electrical steel selection are closely linked.

What Could Change for Electrical Steel?

There is no specific electrical steel grade for a rare-earth-free motor. Requirements depend on the motor design and operating range.

Non-oriented electrical steel laminations for EV motor core

Core Loss at Higher Frequencies

As motor speed and electrical frequency rise, iron loss becomes more important.

A standard core-loss value measured at one test condition may not fully represent what happens inside a high-speed traction motor. For some applications, performance at higher frequencies is more relevant.

Lamination Thickness

Thinner laminations can reduce eddy-current loss and are widely used in high-performance EV motors.

But very thin steel can make stamping and stacking more demanding.

The right thickness depends on the motor rather than on a general rule.

Magnetic Performance

Low core loss is only one requirement.

Permeability and saturation behavior also matter, especially when a motor is being pushed toward higher torque density or a more compact design.

Mechanical Requirements

High-speed rotors also place mechanical demands on the laminations.

This is particularly important in reluctance-type motors, where the rotor can use complex flux-barrier structures.

Rare-Earth-Free Motors Are Not One Technology

Several motor architectures can reduce or eliminate rare-earth magnets.

Motor Type	Rotor Principle	Rare-Earth Magnets	Main Trade-Off
Permanent Magnet Synchronous Motor	Permanent magnets	Commonly used	High efficiency and power density
Rare-Earth-Free Permanent Magnet Motor	Non-rare-earth magnets	No	Maintaining compact size and magnetic strength
Electrically Excited Synchronous Motor	Rotor windings	No	Greater rotor-system complexity
Induction Motor	Electromagnetic induction	No	Higher rotor losses in some conditions
Synchronous Reluctance Motor	Magnetic reluctance	No	Rotor design and torque density

The choice depends on the vehicle and application.

1789110274514-Rare-Earth-Free EV Motor Technologies.webp

Rare-earth-free EV motor types including EESM induction and synchronous reluctance motors

BMW and Valeo Show the Technology Is Already in Use

Tesla is not the first automaker to pursue motors without rare-earth permanent magnets.

BMW uses current-excited synchronous motors without permanent magnets in the rotor. Valeo is also developing a rare-earth-free electrically excited synchronous motor for EV applications, with series production targeted for 2027.

The technology itself is already practical.

The harder part is combining efficiency and power density with manufacturing cost and scale.

That is where Tesla's claims around size, weight and efficiency become more interesting.

Beyond Electrical Steel: Amorphous Materials Are Also Moving Into EV Applications

Electrical steel remains the standard soft magnetic material for most traction motors, but it is not the only material being explored.

Amorphous alloys have much lower thickness and can offer very low iron loss, particularly at higher frequencies. That makes them interesting for motor designs where reducing high-speed or high-frequency losses becomes a priority.

Their use in traction motors has historically been limited by manufacturing challenges. Amorphous ribbon is much thinner and harder to process into complex motor-core geometries than conventional electrical steel.

That gap is beginning to narrow.

HWHG has moved amorphous magnetic material beyond laboratory-scale development into mass production, with the material already used in new-energy vehicle applications in China.

1782974961913-HWHG amorphous magnetic cores in various types and sizes arranged for industrial product display.webp

HWHG amorphous alloy production line for automotive magnetic materials

This is relevant to the rare-earth-free motor discussion because changes in motor architecture are encouraging engineers to look more closely at the entire magnetic system, not just the permanent magnet.

Electrical steel is likely to remain the main material for most motor cores, while amorphous alloys may find a role in applications where reducing iron loss justifies the additional manufacturing complexity.

Reluctance Motors Are Also Improving

Synchronous reluctance motors take a different approach.

They generate torque through rotor geometry rather than permanent magnets.

Their long-standing challenge has been torque and power density compared with high-performance permanent-magnet motors. Recent development has focused on better rotor design, higher operating speeds and lower-loss magnetic materials.

Research into amorphous and other low-loss soft magnetic materials is part of that work, particularly for high-speed applications where iron loss becomes more difficult to control.

The material question is therefore becoming broader as motor architectures evolve.

Why Tesla's New Motor Matters

Tesla has not invented the rare-earth-free motor.

BMW already uses electrically excited synchronous motors, and induction motors have a long history in EVs.

What stands out is the combination Tesla is claiming: no rare-earth metals, smaller size, lower weight and improved efficiency.

If those figures hold in production, they would suggest that some of the traditional performance compromises are becoming smaller.

That does not mean permanent-magnet motors are disappearing. It means automakers may have more viable options than they did a few years ago.

What This Means for Electrical Steel Buyers

For electrical steel buyers, the key issue is not whether a motor uses rare-earth magnets. It is how the motor operates.

EV traction motors are moving toward higher speeds, tighter packaging and lower losses. Depending on the design, buyers may need to look beyond the grade name and consider:

thickness
core loss
test frequency
magnetic polarization
mechanical properties
coating
dimensional tolerance
stamping requirements

For high-speed or high-frequency applications, material data closer to the actual operating range can be more useful than a standard catalog figure alone.

The Bigger Picture

Tesla's Cybercab motor is part of a wider shift in EV motor design.

Engineers are not simply replacing one magnet with another. They are reconsidering the rotor, magnetic core, windings and thermal design together.

That opens the door to a broader mix of magnetic materials.

Electrical steel will remain central to EV motor production, while amorphous alloys are beginning to move from research into selected automotive applications.

Rare-earth use may fall in some motor designs.

The importance of the magnetic core does not.

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