Resources from the earth have been used since the dawn of man for technological advancement. Goldman Sachs, an investment firm, predicted that in 2013 there will be a rare earth surplus. Even though there are experts who refute this analysis, exploration and mining companies have set out to exploit these resources. Products can be developed utilizing these resources, thus satisfying both customers, and investors.
The Toyota Prius uses the resource neodymium. This mineral is increasing in demand because it is a metal used for building strength magnets. Analysts project that neodymium will have a significant value in the following years. Since many industries are switching to renewable energy sources, the demand for permanent magnets is increasing. These magnets are used in applications such as wind turbines, electric vehicles and electric motors. To supplement the research of these minerals, the U.S. Department of Energy is willing to offer $30 million for research in alternatives to earth elements. These alternatives are vital to securing the supply of materials and cost savings.
Dr. Chen Zhanheng who serves as a central figure in The Chinese Society of Rare Earths as Director of the Academic Department states that demand for NeFeB, or neodymium-iron-boron, will increase by 259,026 tons in the next decade, and 176,289 metric tons within the next few years. These neodymium-iron-boron magnets will primarily be utilized for the operation of wind turbines. A single wind turbine uses a ton of neodymium for each megawatt of generating capacity. With the demand for renewable sources increasing, the expected demand for neodymium will also increase.
As mentioned before, Toyota needs these minerals when constructing green cars such as the Prius. Toyota analyzed the high price of neodymium and decided to seek an alternative metal to be used in their motor vehicles. This company is currently constructing the RAV4 EV which is a pure electric vehicle; this car gets its energy from being plugged into a power source. This is Toyota’s first step in escaping the use of rare earth materials. This company is also designing a new car with a new partner, Tesla Motors who is an electric sports car manufacturer.
The Tesla motor is special because it does not require the need for magnets to power up. Instead, the motor utilizes stacked steel laminations when an electric current is produced. The laminations create a magnetic field that rotates, thus pushing the motor. The motors are able to recycle energy when the driver brakes. The regenerative braking system is used on hybrids, making the partnership between Toyota and Tesla, that much more convenient.
Toyota is making a great strategic business move. Not only have they diversified their resources, but their ambition to ensure the future developments of different vehicles is admirable. By slowly easing away from a necessary resource before the value increases, they will save on manufacturing costs in the future. Toyota’s project to develop an all-electric vehicle that is purely plug-in will attract consumers. Many drivers are slowly going green by taking the necessary steps to save our planet; soon, we may all be driving all-electric vehicles.
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