# Tesla drops rare earths in Cybercab motor to cut China risk *The drive unit shrinks 18% and sheds 25% in weight, while federal regulators open a safety review into the driverless vehicle in Texas.* **Published:** September 5, 2026 **By:** Mina Okoro **Section:** Energy & Critical Minerals — Cross-border **Format:** Why It Matters **Confidence:** high **Source:** https://eastasiabrief.com/energy-minerals/tesla-drops-rare-earths-cybercab-motor-cut-china-risk-187 **Publisher:** East Asia Brief (https://eastasiabrief.com/) --- ## What to know - The purpose-built autonomous vehicle began paid passenger service in Austin, Texas, on Sept. - Chief Executive Officer Elon Musk confirmed the powertrain change on Sept. - The new drive unit reduces physical volume by 18% compared with earlier high-performance units. ![Technicians assemble a silver Cybercab on a factory line, with an electric motor sitting on a workbench in the foreground. (AI-generated image)](https://eastasiabrief.com/media/2026-09-05-12b6d0a90c27.webp) *Technicians assemble a silver Cybercab on a factory line, with an electric motor sitting on a workbench in the foreground. (AI-generated image)* Tesla detailed technical specifications on Sept. 5 for a Cybercab traction motor that eliminates rare earth metals entirely, testing whether commercial electric vehicles can bypass Chinese mineral refining bottlenecks. The purpose-built autonomous vehicle began paid passenger service in Austin, Texas, on Sept. 4. Tesla held a private launch event for the fleet on Sept. 3 at its Texas factory. Chief Executive Officer Elon Musk confirmed the powertrain change on Sept. 4 on the social platform X. The Cybercab motor "uses no rare earth metals, but maintains the same range," Musk said. The new drive unit reduces physical volume by 18% compared with earlier high-performance units. Total unit weight fell by 25%, while manufacturing cycle times dropped, according to vehicle specifications displayed at the launch. The commercial rollout puts Tesla's March 1, 2023 design commitment into production. Colin Campbell, then vice president of powertrain engineering, announced at Tesla's Investor Day that the company would cut rare earths to zero in next-generation powertrains. Automakers rely on neodymium-iron-boron permanent magnets — compact alloys that create strong magnetic fields — for light vehicle traction. China controls more than 90% of global output for processed permanent magnets and sintered rare earth blocks. China's Ministry of Commerce tightened control over that supply line on April 4, 2025. Announcement No. 18 of 2025 placed export controls on seven medium and heavy rare earth elements, including dysprosium and terbium. Those heavy additives allow neodymium magnets to operate at elevated temperatures inside a motor without demagnetizing. Western automakers audited permanent-magnet content across tier-one supplier networks after the ministry published the restriction. Tesla consumes between 2% and 3% of global neodymium-iron-boron magnet production across its vehicle lineup, industry analysts estimate. That scale makes the company's motor redesign the first high-volume commercial trial of magnet substitution. Permanent-magnet motors deliver high power density — the ratio of mechanical output to motor mass — making them standard for long-range electric sedans. Removing rare earths historically forced engineers to accept heavier components or lower torque. Alternative motor configurations include wound-rotor synchronous motors, which replace permanent magnets with copper windings energized by electrical current. Renault and BMW have adopted wound motors to eliminate rare earth exposure in European models. Wound designs require continuous electrical power to the rotor, which can trim high-speed highway efficiency. Permanent magnets maintain constant magnetic excitation without drawing extra battery current, supporting lower energy consumption per mile. Other approaches substitute rare earths with ferrite magnets, which use abundant iron oxide. Ferrite compounds provide lower magnetic flux density, requiring physically larger rotors and stator assemblies to match neodymium torque ratings. Emerging alternatives include iron-nitride magnets, which theoretical models suggest can match neodymium magnetic strength without heavy rare earths. No commercial supplier has scaled iron-nitride production for high-volume automotive drive units. Tesla has not published a technical white paper or regulatory filing detailing the chemical composition of its Cybercab magnets. The company has not stated whether the motor uses ferrite blends, iron nitride or wound coils. The Austin automaker also withheld data on stator slotting and rotor geometry. Component suppliers outside the United States said they have not received mass-production procurement requests for non-rare-earth magnet formulations tied to the program. The lack of technical disclosure leaves component buyers unable to verify how Tesla offset potential losses in motor flux. Automotive engineers must evaluate whether the vehicle achieved equivalent driving range through aerodynamic packaging or battery tuning. The commercial deployment faces concurrent scrutiny from federal vehicle safety regulators in Washington. The National Highway Traffic Safety Administration opened an audit query into the Cybercab on Sept. 4. The investigation, docketed as AQ26002, covers an estimated 1,000 vehicles. The regulator is examining the technical data and process Tesla relied on when self-certifying compliance with Federal Motor Vehicle Safety Standards. The Cybercab operates without conventional driver controls, lacking a steering wheel, pedals or exterior mirrors, according to agency records. NHTSA said it will determine whether Tesla's certification improperly assumed certain federal standards do not apply. Tesla told the safety agency that it certified the vehicles under existing statutory self-certification frameworks. The company also informed regulators that it plans to expand commercial deployment to additional vehicles and municipalities. Engineers across South Korea and Japan have requested motor teardown samples to inspect the rotor core. Japanese magnet makers Shin-Etsu Chemical and Proterial supply non-Chinese permanent magnets to global automotive manufacturers. South Korean battery cell makers track the motor's electrical consumption to calculate battery pack dimensions. A motor that draws higher current to offset weaker magnetic flux requires additional cell capacity to preserve driving distance. Tesla scheduled Cybercab displays in Hong Kong, Tokyo, Beijing and Shanghai for late September, according to company announcements. Commercial passenger deployment in those markets will require technical filings detailing motor safety and construction. ## Impact map | Event | Korea | China | Japan | Global impact | | --- | --- | --- | --- | --- | | rare earth elimination | battery sizing re-evaluated | magnet export leverage narrows | magnet suppliers face alternative alloys | EV makers test non-Chinese motors | ## In this story - **Companies:** Tesla - **Tickers:** TSLA - **Exposed:** Shin-Etsu Chemical, Proterial - **Policy:** Export Controls - **Impact:** Supply Chain, Cost Structure ## Primary sources 1. tesla.com 2. nhtsa.gov 3. teslant.com 4. wenxuecity.com 5. digitaltoday.co.kr --- Cite as: East Asia Brief, "Tesla drops rare earths in Cybercab motor to cut China risk," September 5, 2026. https://eastasiabrief.com/energy-minerals/tesla-drops-rare-earths-cybercab-motor-cut-china-risk-187