Business · Companies · 1 hr ago
GM Ends Long-Term Magnet Supply Deal, Prompting Arbitration
GM ended its long-term magnet supply contract with e-VAC Magnetics, the US subsidiary of German manufacturer VAC, effective July 1.
The companies signed the deal in 2023 for magnets used in GM electric-vehicle motors.
VAC invested $500 million in a South Carolina factory designed to produce 2,000 tonnes of magnets a year, with 90% planned for GM.
VAC is seeking damages through arbitration, saying GM improperly ended the contract.
The decision comes as Western companies try to reduce reliance on China, which controls 90% of permanent-magnet production, while GM is slowing some electric-vehicle investments amid weak performance and reduced US incentives.
The arbitration could affect VAC’s sale price: Energy Fuels agreed in June to buy VAC for $1.9 billion and said the final price may change depending on the outcome.
GM ended a long-term deal to buy permanent magnets for electric vehicle motors from e-VAC Magnetics, the US subsidiary of German manufacturer VAC.
VAC has begun arbitration against GM, seeking damages over what it calls an improper contract termination.
The companies signed the supply agreement in 2023, and VAC built a factory in South Carolina with capacity to produce 2,000 tonnes a year.
The factory was expected to supply 90% of its output to GM.
The termination comes as GM adjusts its electric vehicle business, which has faced difficulties.
- Who
- General Motors and e-VAC Magnetics, the US subsidiary of German magnet maker VAC.
- What
- GM ended a long-term magnet supply contract, and VAC began arbitration seeking damages.
- When
- GM terminated the contract effective July 1; the report was published October 23, 2026.
- Where
- The planned factory is in South Carolina, United States.
- Why
- The article says GM is adjusting its electric vehicle business amid weak performance; it does not state GM’s specific reason for ending the contract.
General Motors
VAC
Contract termination
General Motors
GM said a supplier had filed arbitration seeking damages after the termination of a strategic sourcing agreement.
VAC
VAC is pursuing damages, claiming the contract was improperly terminated.
VAC's prospects
General Motors
GM did not state a view on VAC's commercial prospects.
VAC
Energy Fuels said VAC's commercial success and magnet production capacity were not in question.
GM and VAC signed a long-term agreement for VAC to supply permanent magnets for GM electric vehicle motors.
VAC built a South Carolina factory with capacity to produce 2,000 tonnes a year, with 90% of output planned for GM.
GM terminated the long-term purchase agreement with e-VAC Magnetics.
VAC began arbitration seeking damages from GM over the contract termination.
Yonhap reported the termination and arbitration proceedings.
- Contract signed
- 2023
- Termination effective
- July 1
- Factory location
- South Carolina, United States
- Annual production capacity
- 2,000 tonnes
- Planned share of factory output for GM
- 90%
- VAC investment in factory
- $500 million
1 source
What people are saying
a supplier of components for electric vehicle drive motors has filed arbitration seeking damages arising from the termination of a strategic sourcing agreement
there is no problem with VAC's commercial success and magnet production capacity
Depending on the arbitration outcome, the final acquisition price of VAC may be adjusted