Electric carmaker Tesla has disclosed that production of its Model 3 was suspended temporarily towards the end of last of month. It was a planned breather and it may lead to an increase in production levels in the near future. The suspension of production took place from February 20 and ended on February 24 at the Fremont assembly plant.
Besides the Model 3 other brands that Tesla makes at the assembly plant include Model X SUV and Model S sedan. Batteries for its electric vehicles are made at a factory located in the state of Nevada. According to a spokesperson for Tesla the temporary suspension of production was aimed at improving automation as well as systematically addressing bottlenecks with a view to increasing production rates in future.
The Model 3 is aimed at the mass market but production rates are below schedule as it has proved to be more challenging than had originally been anticipated. By the close of this month Tesla has set a target of producing 2,500 Model 3 sedans per week. This level is expected to be increase to 5,000 mid this year.
This comes in the wake of reports indicating that in Tesla’s long range Model 3 sedan the electric carmaker will use a neodymium-based magnetic motor. Consequently this will strain rare earth metal supplies which had been shunned for years following a ban on exports by China, the top-producing country.
Tesla is not the only electric carmaker to use neodymium-based magnetic motors since it is preferred due to the fact that it is more efficient, stronger and lighter compared to induction motors which use copper coils. According to imarc, a research group, the market for magnets made from neodymium-iron-boron is now valued at over $11.3 billion. In the years 2010 to 2017 demand for these magnets increased at a CAGR of 8.5%.
“Some electric car motors use the permanent magnet technology, probably the most famous is the Tesla Model 3 Long Range. All the other Tesla models — Model X and Model 3 standard — use induction motors,” a metals analyst at Roskill, David Merriman, said.
Last year the global demand for neodymium was 31,700 tons but there was a deficit in supply of 3,300 tons. This year the demand for the rare earth mineral is expected to rise to 34,200 tons and the deficit is expected to widen. A kilogram of neodymium costs $70.