Neo Performance Materials’ wholly-owned subsidiary in Estonia, NPM Narva OÜ, bagged the supply of sintered rare earth magnets to a European Tier 1 supplier of electric vehicle traction motors.

The contract represents about 35 per cent of the finished magnet capacity of the new European facility being built by Magnequench Sintered Magnets. Production is expected to start in the second half of 2026 and continue through 2033, with peak supply anticipated in 2029.

“Neo is focused on becoming the first manufacturer and supplier of made-in-EU rare earth magnets for EV traction motors. This is one more endorsement that the need for parallel, local-for-local supply chains is defining the future of the EV manufacturing transition in Europe and North America,” said Rahim Suleman, Neo’s president and CEO.

Magnequench’s new facility in Europe is set to produce 2,000 metric tons of magnet blocks annually in Phase 1, sufficient for 1 to 1.5 million electric and hybrid vehicle traction motors. This plant is expected to be the first sintered magnet plant outside Asia, focusing on supplying EV motor manufacturers in Europe and North America, where local production is projected to reach 40 million EV traction motors by 2035.

Neo is positioning itself to benefit from regulatory changes and the EV industry’s shift towards local supply chains. The EU Critical Raw Materials Act aims to process 40 per cent of rare earth materials within the EU, source 25 per cent of rare earth magnetic material from recycling in the EU, and limit the sourcing of rare earth magnets from outside the EU to no more than 65 per cent from a single jurisdiction. Additionally, the US will impose a 25 per cent tariff on rare earth magnets from China starting in 2026.