(Yicai Global) March 3 -- Tesla's plan to reduce its use of silicon carbide and stop using rare earth metals in its future electric vehicles will not greatly impact Chinese producers and miners of the materials in the short term, some of them reportedly said.

Tony Electronics is still expanding its silicon carbide production capacity and will deliver 500,000 pieces in 2025, Cailianshe reported an employee in the board secretary’s office of the Huzhou-based company as saying. The firm has not yet formulated plans for afterward, the person added.

Tesla aims to slash the use of silicon carbide transistors by 75 percent, Vice President Colin Campbell said at the US EV giant's 2023 Investor Day presentation yesterday. And Tesla’s next-generation powertrain platform will feature motors built without any rare earth metals, he added.

“It’s hard to judge the situation right now,” a staffer at Sanan Optoelectronics, a Xiamen-based silicon carbide producer, told Cailianshe. Many things are unknown, such as what technology Tesla will use, whether it already has the new tech to replace silicon carbide, and whether Chinese carmakers will also use similar technologies, the person noted.

While Tesla's move hit the shares of China Northern Rare Earth Group High-Tech, it will not affect the company's operation, National Business Daily reported yesterday, citing the investor relations department of the rare earth metals producer. Tesla said its next-gen powertrain system will feature motors without any rare earths, but did not specify what it will use to replace them, added the firm, which is based in China’s Inner Mongolia Autonomous Region.

Shares of China Northern Rare Earth Group High-Tech [SHA: 600111] ended little changed today at CNY28.07 (USD4.07) apiece, after dropping 4.3 percent yesterday.

Silicon carbide is a third-generation semiconductor material suitable for making devices with high-temperature resistance, high frequency, anti-radiation, and high power. It can help new energy vehicles lower battery costs, increase charging and mileage, and shorten charging times.

It is technically possible to create a permanent magnet motor without rare earth metals, Wang Zhixin, deputy director of Shanghai Jiaotong University's electrical engineering department, told Yicai Global yesterday. A eye needs to be kept open for Tesla's technical results and related design effects, Wang pointed out.

Editor: Futura Costaglione