Renault seeking Chinese rare-earth-free motor supplier

Renault has reportedly ended its collaboration with Valeo on developing a next-generation electric vehicle (EV) motor that avoids rare earth magnets, and is actively seeking a more cost-effective supplier in China, according to two sources familiar with the matter. The French automaker is said to be pursuing a Chinese partner to supply the stator component while retaining final assembly in France.

The decision comes amid growing pressure on automakers from soaring raw-material costs and supply chain disruptions. China controls the majority of global rare-earth mining and refining capacity, which has prompted tighter export controls and triggered alarm across the automotive sector.

The motor in question, known internally as the “E7A”, has a design specification of 200 kW power and an 800-volt system for faster charging. That aligns with Renault’s upcoming compact EV models slated for release around 2028. The vehicle components will be assembled at Renault’s Cleon plant in France, albeit with a stator potentially sourced from China.

By shifting the stator-supply chain to China, Renault aims to reduce its manufacturing costs and mitigate the impact of rare-earth supply risks. Despite the move, Renault emphasises that the motor assembly and much of the value-chain remain in France, preserving its “made in France” credentials. One source noted that Renault’s EV division, Ampere, is still evaluating options and has not finalised a contract.

Analysts view this as a pragmatic shift: the rare-earth-free motor development effort aligns with long-standing industry efforts to reduce dependence on China-dominated supply chains, yet the reality of cost and scale means many automakers are opening up to sourcing from lower-cost Chinese engineers or manufacturers.

For Renault the move also fits into its broader strategy of cost-control in the EV era. The automaker has faced increasing margin pressures in recent years as it transitions from traditional ICE (internal combustion engine) vehicles to electrified models amid intensifying competition. By leveraging Chinese supplier economics for specific components while retaining core assembly in Europe, Renault is attempting to balance innovation, cost and national industrial considerations.

That said, the decision raises questions about industrial sovereignty and supply-chain resilience. While rare-earth-free motor technologies are accumulating, they remain at differing levels of maturity. Moreover, relying on Chinese stator supply could re-introduce dependency on a country that regulatorily controls a vast share of the upstream minerals and processing chain. Industry groups have warned of the broader risk that China’s export licensing and restricted rare-earth flows pose to global automotive production.

Valeo, meanwhile, appears to be continuing its own development of a magnet-free motor (dubbed “iBEE”) in collaboration with German partner Mahle, which underscores the fragmented nature of EV powertrain strategies across the industry.

In short, Renault’s pivot reflects the twin pressures of raw-material disruption and cost competition, especially in the EV transition. The outcome will be worth watching: whether sourcing from China will deliver the intended cost savings and whether the complex motor architecture performs as hoped when the next-generation EVs hit the market in 2028.