In an effort to find alternatives to rare earth minerals in electric vehicle production, the venture arms of General Motors and Stellantis are investing in Niron Magnetics, a Minnesota-based company specializing in magnetic technology for EV motors.

The two automakers invested in Niron’s latest $33 million round of funding that will be used to advance the commercialization of Niron's iron nitride-based Clean Earth Magnets.

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China has a stranglehold on battery production. Carmakers are dependent on China's rare earth materials like terbium, dysprosium, praseodymium, and neodymium, which are widely used in EV batteries. However, Niron is focusing on permanent magnets, and believes iron nitride magnets are more magnetic than those made of neodymium and praseodymium and far more abundant.

“We were drawn to invest in Niron by the impressive sustainability benefits that its Clean Earth Magnet technology offers for vehicles and the inherent scalability of their solution,” Adam Bazih, managing partner at Stellantis Ventures, said in a press release on Wednesday. “Making powerful magnets from plentiful commodity materials decouples new production from rare earth mine development and lowers overall environmental impact, which directly aligns with Stellantis’ commitment to reach carbon net zero by 2038.”

The exact investment amounts by GM and Stellantis were not disclosed, but the companies said they will collaborate on EV magnet motor technology development. According to Reuters, a person close to the deal said GM made an investment of $7 million and Stellantis made an investment of $5 million.

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Kai Daniels, supervising principal of GM Ventures, said the investment will be key for the company in establishing a North American EV supply chain, an important factor for vehicles to be eligible for U.S. federal tax credits.

In mid-October, GM said it was delaying its production start of electric trucks from 2024 until late 2025, citing the need to focus on capital investments with the EV demand. The company said the delay was not related to the United Auto Workers strike. GM and the UAW struck a tentative deal two weeks ago in a move toward ending strikes against Detroit automakers.