Renault Seeks Supplier for Rare Earth-Free Engines

Renault has decided to end its collaboration with Valeo in the development of a new rare earth-free electric motor and is now considering turning to a more economical Chinese supplier, according to two sources familiar with the project who spoke to Reuters. This decision marks a significant shift in the French manufacturer's strategy, which aims to cut costs amid intense competition in the global electric vehicle market.

The project, internally known as E7A, aimed to create a new generation of more compact, powerful, and sustainable electric motors. Renault and Valeo announced their partnership in 2023 to jointly develop this technology, which would eliminate the need for materials like neodymium or dysprosium, essential in conventional motor magnets and predominantly supplied by China.

Beijing controls around 70% of the world's rare earth mining and 85% of the refining, leading to a strong dependency on the Asian country. The increasing restrictions imposed by the Chinese government on the export of these materials have driven the automotive industry to seek technological alternatives.

Renault has been using rare earth-free motors since 2012, although the new development in collaboration with Valeo promised significant improvements in power and efficiency. The French group highlighted at the time that it was "a made-in-France innovation," emphasizing its commitment to European technological autonomy.

However, the manufacturer has ultimately opted to develop the motor internally, managing the entire value chain except for the stator—the fixed part of the motor housing the rotor—which could be sourced from a Chinese supplier. This decision had not been made public until now.

"The E7A project is no longer being carried out with Valeo," confirmed one of the sources cited by Reuters. "It will be entirely conducted within Renault, except for the stator, which will likely be purchased from a Chinese manufacturer," they added.

The change is primarily driven by the need to reduce costs. Chinese suppliers offer significantly more competitive prices than their European counterparts, which is crucial for a manufacturer like Renault, smaller than other traditional European groups such as Volkswagen or Stellantis.

From the group's electric subsidiary, Ampere, a spokesperson confirmed that various options are being evaluated and that "a Chinese partner is a possibility," although they insisted that "the process is ongoing" and no final decision has been made yet.

Despite this shift, Renault assures that the motor will be assembled at its Cléon plant in northern France, where the electric units for the Mégane E-Tech are also manufactured. Additionally, the electric inverter will use silicon carbide modules supplied by the Franco-Italian STM.

"The possibility of manufacturing the stator in France is also being considered," indicated the Ampere spokesperson, suggesting that the company is still looking to keep most of the production within the country.

In recent years, Renault has engaged in multiple technological alliances to share the high costs of electric vehicle development. The brand has also intensified its collaboration with Chinese partners, who lead the advancement in this technology. In fact, a team of Chinese engineers participated in the design of the new electric Twingo, completed in just two years.

The E7A motor will be crucial for Renault's next generation of compact electric vehicles, scheduled for 2028. These models will be part of the new strategic plan that Ampere's CEO, François Provost, will present in March.

The future engine will offer a power output of 200 kW, 25% more than the group's current motors, such as the one in the Renault Scenic. Additionally, it will incorporate an 800-volt system that will significantly reduce charging times.

Meanwhile, Valeo continues with its own pursuit of a motor without permanent magnets. The French company is working with the German supplier Mahle on developing the "iBEE" model, which will reach 350 kW of power and is also set to hit the market in 2028.

Renault's decision to disengage from Valeo in this project underscores the tensions facing the European industry amid cost pressures and China's rapid technological expansion.