Rare Earths: Toyota’s EV goals and its impact on rare earths

Toyota has announced that the company will move its electrification goals forward by 5 years. By 2025, Toyota aims to have sold 4.5M or more hybrids and plug-in hybrid vehicles, and 1M battery-electric and fuel-cell cars. The acceleration of Toyota’s electrification goals goes hand-in-hand with Toyota’s plan of launching solid state battery technology, although there are several hurdles involved in this as was outlined in Roskill’s recent post.

Roskill view: Toyota remains the final frontier for the use of nickel-metal hydride (NiMH) batteries in hybrid electric vehicles, with most other auto manufacturers committed to Li-ion battery technology. Toyota has already shifted the hybrid drivetrains to be compatible with both battery technologies, for example in the 2018 Toyota Camry. 

For rare earth NiMH batteries, automotive drivetrains (largely reflecting Toyota’s HEV fleet) have grown to account for over half of demand in 2018. The other major consuming application of NiMH is in portable electronics, which has already been saturated by Li-ion battery technology and is not expected to offer a growing market for rare earth batteries.

Lanthanum and cerium are already significantly oversupplied, and batteries accounted for around 13% of demand for these elements in 2018, over 6% of which was in hybrid electric vehicles. Once Toyota switches battery technology away from NiMH, the demand for lanthanum (and to a lesser extent, cerium) will be adversely affected. An accelerated decline in demand for these elements in batteries would exacerbate the already expanding surplus supply as the rare earths industry focusses its attention on neodymium and praseodymium demand in magnets.

Roskill’s Report, Rare Earths Industry and outlook 2018 was published in December. The report details forecasts to 2028 and benefits from quarterly updates to keep you up to date with our latest view of the industry