LONDON (Reuters) - UK auto supplier Dowlais is developing rare earth magnets for production in the U.S. market as carmakers look to source more parts locally and benefit from subsidies provided by the Inflation Reduction Act (IRA), its top executive said on Thursday.
The company aims to launch production within 12 to 18 months and is talking to a wide range of carmakers and top tier suppliers about providing them for electric vehicles (EVs), CEO Liam Butterworth told Reuters.
"We see the IRA as a very good opportunity for us because the people building electric motors will have sourcing challenges as 95% of the world's magnets today come from China," Butterworth said. "We're working right the way down to rare earth sources to make sure that we've got the right supply chain in place."
Butterworth said that the rare earths would be sourced in Canada, the United States, Australia and Europe. The company has spent four years localizing production and supply chains in Europe, North America and Asia.
"We're really well positioned to support our North American customers who need localized suppliers," he said.
Once Europe passes its own version of the IRA, Dowlais will likely make rare earth magnets there too, Butterworth said.
On Thursday Dowlais, formerly known as GKN Automotive, completed its spinoff from Melrose Industries Plc. The company specializes in sideshafts, propshafts and e-drive systems for EVs.
The company had revenue of around 4.2 billion pounds ($5.23 billion) in 2022. Dowlais supplies around 90% of the world's carmakers - including legacy carmakers, new entrants and Chinese EV makers, and Butterworth said the company is "focused on all three groups in equal amounts."
Its sideshafts are used on nine of the world's top 10 selling EVs and its e-drives feature in four of the top 10.
Butterworth said Dowlais aims to get its e-drive into more models, but only those with longer-term, profitable prospects, like the Fiat 500e from Stellantis which it already supplies.
"It's a great product and its life is going to be extended," he said. "We want to make sure we have those kind of programmes going forward."Source: https://finance.yahoo.com/news/eye-ira-dowlais-targets-u-143616066.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS5oay8&guce_referrer_sig=AQAAAFLQT2z-o2pnRtZh0EzzAXE4a2RYCTJrQza60pEDNK9-59bzoEdjlCZUEdZIOrw8u_m3wEPIh65p726kTPW3CDfwEZsyLjLyBvNRZbBfj0PiV0qgLp6v2PVrzLE6u1K8T9MK-uT_voHJCQdq2uDX9wc9Cj7k36hjXzvigDtp4eFP