Japanese automaker Honda has co-produced the world’s first magnet for hybrid and electric cars that requires no heavy rare-earth metals.

The quest to find an alternative to heavy rare-earth elements in magnet manufacturing came after a 2010 dispute, during which China temporarily banned exports of rare-earth minerals. Even before that, however, Honda had been working to reduce the use of the materials in its manufacturing, as China began cutting back export quotas starting in 2006.  

The motor is not completely without rare-earth elements. It still uses the light rare-earth element neodymium. But neodymium can be sourced from countries other than just China.

Carmakers use neodymium magnets because they have the highest magnetic force of any magnet. Demand for these magnets is expected to soar in coming years as more consumers buy all-electric and hybrid vehicles.

Magnet manufacturers usually add heavy rare-earth metals such as dysprosium or terbium in order for the magnet to have the high heat-resistance properties needed to operate in a car motor. But the reliance on these elements adds price volatility and supply chain uncertainty, especially when they can only be sourced from one location.

Research firm Technavio estimates that the rare-earth metals market will grow at 14 percent annually and will be worth more than $9 billion by 2019. There are 17 elements considered to fall into the rare-earth category. The growth in the global market is largely fueled by the need for magnets for hybrid vehicles and electronics manufacturing.

Japanese companies such as Toyota, Toshiba, Sony and Honda have all been looking to source rare-earth metals outside of China or reduce their reliance on them all together. Even as mineral exploration expands globally, China will remain the dominant producer and consumer of rare-earth metals in the near future, according to Technavio.

To overcome the barrier of relying on these elements, Honda teamed up with Daido Steel, a company with a unique approach to making neodymium magnets. It uses a process called "hot deformation," which creates nanometer-scale crystals. The nanometer crystal structure is much smaller than the crystal structure formed through the more common method of manufacturing, according to Honda. The nanostructure allows for magnets to achieve higher heat resistance without requiring heavy rare-earth metals.

Honda worked with Daido to reshape the magnet to better suit it for applications in a motor, while also redesigning the motor to accommodate the new magnet.

Honda wants two-thirds of its cars to be hybrids, all-electric or fuel-cell vehicles by 2030, according to Reuters. Japan is one of the top countries for electric-vehicle sales and boasts more charging stations than gas stations.

The new motor will hit the market this fall in Honda’s Freed hybrid minivan, which is sold in Japan and other Asian markets.