German magnet specialist Vacuumschmelze (VAC) first secured General Motors as a long-term US customer for permanent magnets used in electric motors in 2023. However, this collaboration has seemingly now come to an abrupt end.

As reported by Reuters, GM has terminated its long-term supply contract with eVAC Magnetics, the US subsidiary of Vacuumschmelze (VAC). Both parties are now reportedly embroiled in arbitration proceedings. The news agency cites official documents and a source ‘familiar’ with the situation.

The agreement signed in early 2023 between the US automaker and the German magnet materials specialist Vacuumschmelze (VAC) specifically involved a minimum ten-year supply of rare-earth permanent magnets for GM’s North American operations. Under the agreement, VAC committed to establishing a production facility in North America to manufacture permanent magnets for electric motors, intended for use in several GM electric vehicles starting in 2025. At the time of signing, the models explicitly mentioned included the Chevrolet Silverado EV, Blazer EV, and Equinox EV, the Cadillac Lyriq, as well as the GMC Sierra EV and Hummer EV.

However, it is clear that with the second term of President Donald Trump, the EV business in the US has progressed significantly more slowly than expected. This has also impacted General Motors’ previously established electrification plans. In a stock exchange announcement, GM stated that it had “terminated a strategic sourcing agreement” and is now involved in arbitration proceedings.

Additionally, VAC is currently in the process of being acquired by Energy Fuels. 9 billion for the acquisition of VAC.

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