Japanese automaker Toyota (TM.NYSE, TYT.LSE, 7203.TYO) is developing a new electric car motor for hybrids to reduce its dependence on China’s rare earth minerals, the Wall Street Journal reported. Toyota is reportedly on the verge of a breakthrough in developing an electric motor that does not use rare earth metals. The price of rare earths has risen steeply in recent months, particularly in the wake of a dispute in the East China Sea between China and Japan. Following the spat, Chinese authorities were suspected to have unofficially embargoed rare earth exports to Japan and other countries. China supplies 95% of the world’s demand for rare earths, and although Toyota has attempted to diversify its suppliers to include such countries as Argentina and Vietnam, it still purchases more neodymium than any other car firm.
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