German auto parts supplier Schaeffler said in a statement on its official website on April 19 that Schaeffler signed a five-year rare earth metal procurement contract with Norwegian manufacturer REEtec to produce permanent magnets for electric vehicles.
Schaeffler is Germany's fifth-largest auto supplier, mainly supplying bearings to car companies such as Volkswagen, GM and Honda.
The statement noted that the agreement will take effect from 2024. Reuters reported that this is the first public agreement for a European auto supplier or automaker to source rare earths in Europe.
Schaeffler CEO Andreas Schick said: "We are rapidly transforming into an electric vehicle supplier. Therefore, when it comes to rare earths, we need capable partners. In addition to the standard supply chain through China, we also need a local supply chain in Europe."
In recent years, the European Union, the United Kingdom and the United States have established local rare earth and magnet industries. According to media statistics, 98% of the permanent magnets currently needed in the European market are imported from China.