By Michael Elkins
Vacuumschmelze (VAC) announced Monday that the advanced magnetic materials company has entered into a binding long-term supply agreement with General Motors (NYSE:GM). As part of the agreement, VAC will build a facility in North America to manufacture permanent magnets for electric motors using locally sourced raw materials. The agreement is the final step in completing the Memorandum of Understanding VAC and GM announced in December 2021.
"Our agreement with VAC for permanent magnet production in North America represents another major milestone in building a strong, secure, sustainable and cost-competitive supply chain to support our EV growth", said Jeff Morrison, GM Vice President, Global Purchasing and Supply Chain.
"The demand for rare earth permanent magnets and supporting technologies is intensifying at an unprecedented rate as the world shifts to sustainable clean energy. VAC is extremely excited to be partnering with General Motors to take this important step to ensure the realization of GM's all-electric future", said Dr. Alexander Barcza, VAC Vice President Permanent Magnets.
VAC is in the process of establishing a North American permanent magnet production facility to support GM for a minimum of 10 years. The VAC facility is expected to start production in 2025 and create hundreds of new jobs.
Shares of GM are down 2.50% in pre-market trading on Monday.