China's commerce ministry, along with other government agencies, is reportedly considering full-year export quotas on rare earth metals. While the ministry pledges to set quotas in accordance with World Trade Organization rules, abiding by those guidelines still provides China with significant leeway. In the second half of last year, for example, China slashed its export quotas by 72 percent. Since China supplies in excess of 90 percent of world's rare earth metals, this move triggered an immediate surge in prices.

Earlier this month, China cut its first batch of rare earth export quotas by 11 percent, setting the limit at 14,446 metric tons. However, according to Yao Jian, a spokesman for China's Minstry of Commerce, more restrictions will likely come. During a news briefing in China, Jian stated that, "The first batch of export quotas released earlier doesn't represent the full-year quota." China's government is expected to decide on full-year quotas for rare earths after evaluating domestic output and worldwide demand. An official announcement is expected soon.

At least one company, AC Propulsion, has got a solution: its been making AC induction motors without any rare earth metals for decades, as you can read after the jump.

[Source: Xinhuanet, AC Propulsion]
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AC PROPULSION SPEAKS OUT ON RARE EARTH METALS

AC Propulsion Has Been Making EV Motors Without Rare Earth Metals For Nearly 20 Years

LOS ANGELES (January 24, 2011) - AC Propulsion, a global leader in electric drive development, design and manufacturing, today entered the international dialog about the use of rare earth metals in the development of Electric Vehicles (EVs). Media articles have recently surfaced about the use of these metals in electric-drive vehicles including hybrids and EVs. Toyota recently announced that it is actively developing an electric motor that doesn't rely on rare earth metals. As a pioneer in the development of electric drive systems, AC Propulsion notes it has been making EV motors without using rare earth metals for nearly 20 years.

"AC Propulsion has been making AC induction motors, which do not use any rare earth metals, for almost two decades," says Tom Gage, AC Propulsion CEO. "The AC Propulsion induction motor technology, first introduced in 1992, is developed specifically to power vehicles. The BMW MINI E, the Peraves MonoTracer E, and the Tesla Roadster all use this motor technology. These vehicles demonstrate without a doubt that induction motors offer compact, robust, efficient, and lightweight power for electric propulsion. Induction motors are built with iron, aluminum, and copper, so no rare earth metals are needed. This explains Toyota's renewed interest in the induction motor."

Permanent magnet motors use strong magnets made with rare earth materials to provide magnetic force. AC Propulsion's induction motors do not use any permanent magnets. They rely instead on induced magnetism to provide the magnetic force. Possible limits to the availability of rare earth materials have raised concerns about the long-term viability of large permanent magnet motors as used in hybrid and electric vehicles. China, a major suppler of rare earths, may limit exports, increasing these concerns.

About AC Propulsion AC Propulsion is a global leader in the development, design and manufacture of electric vehicle technology. AC Propulsion's proprietary tzero™ technology is a complete solution for electric vehicles, and can be customized for every class of electric vehicle, from a sports car to an SUV to an 8-ton city bus. AC Propulsion is also a leader in the development of Vehicle to Grid (V2G) capable vehicles, as well as the research and development of V2G technology.

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