Tesla’s two-seat Cybercab has gone into public service in Austin, Texas. One detail from its (relatively) low-key launch is important beyond the robotaxi debate. Elon Musk says the car’s motor contains no rare earth metals at all. Tesla first promised that in 2023. It arrives as carmakers worldwide are still nursing bruises from China’s export controls on magnets.
What did Tesla actually announce?
The Cybercab launched at an invitation-only event in Austin on 3 September, with a livestream for everyone else. Musk wasn’t in the room. However, he confirmed the headline claim on X the following day. “The Cybercab motor uses no rare earth metals, but maintains the same range,” he wrote. “This was extremely hard to achieve.”
Tesla also shared figures at the event, reported by Electrek. The new drive unit is 18 per cent smaller and 25 per cent lighter than its existing high-performance motors. It also claims better efficiency, though it hasn’t put a number on that improvement. Tesla hasn’t said which magnet material it uses instead, and the company no longer runs a press office to ask. Electrek’s best guess is iron ferrite or an aluminium-nickel-cobalt alloy, so treat that as informed speculation rather than fact.
Why do EV motors use rare earths in the first place?
Most electric cars use permanent magnet motors. Those magnets typically contain neodymium. Small additions of dysprosium and terbium keep them strong at high temperatures. A typical EV motor contains around a kilogram of rare earth elements. The batteries, by contrast, don’t use any.
Tesla’s own history here is unusual. Its early cars used AC induction motors, named after Nikola Tesla’s design, which need no magnets at all. The Model 3 switched to permanent magnets in 2017 for better efficiency. At its 2023 Investor Day, Tesla said it had cut rare earth use per Model 3 drive unit by 25 per cent since 2017. It then pledged a next-generation motor with none at all. The Cybercab appears to be that motor.
Why is the supply chain so important?
Because China controls the magnets. Reuters reported in June 2025 that China holds over 90 per cent of global processing capacity for rare earth magnets. When Beijing imposed export licences on seven rare earth elements and several magnets in April 2025, shipments halved within a month. European and Indian carmakers warned they were days from halting production lines.
For a company planning to build robotaxis in huge numbers, that dependence is a business risk as well as an engineering one. A motor with no rare earth content removes one of the few components Tesla can’t source outside China.
How efficient is the Cybercab?
Very. In May, Tesla’s vice president of vehicle engineering, Lars Moravy, put the Cybercab’s certified efficiency at 165 watt-hours per mile. He described that as a certified rating rather than a marketing claim. That makes it the most efficient production EV on record. For comparison, a rear-wheel-drive Model 3 is rated at 240 Wh/mi and a Lucid Air Pure at 230 Wh/mi.
The car achieves this with a battery of under 50 kWh and a teardrop body. It weighs around 1,400 kg and seats just two. Tesla has talked of nearly 300 miles of range and a $30,000 price target. Neither figure has independent confirmation yet. Musk’s claim that the new motor “maintains the same range” is worth noting. Ferrite magnets are weaker than neodymium ones, so keeping efficiency level while removing them is the hard part.
Is Tesla the first to do this?
No, and that context is important. Renault has built rare-earth-free motors since the original Zoe. Its electrically excited synchronous motors use a wound copper rotor instead of magnets. The Megane E-Tech, Scenic E-Tech and Renault 5 all use them. BMW’s fifth-generation eDrive units take a similar approach.
What’s different about Tesla’s design is that it appears to keep a permanent magnet motor while swapping the magnet material. Wound rotors need extra electronics and lose some efficiency to the current feeding the rotor. If Tesla has kept the magnet and dropped the rare earths, it has solved a harder problem. Electrek argues the achievement is real but overstated. EV motors already convert more than 90 per cent of their energy into motion. The bigger gains, it suggests, are in packaging and cost.
Was the launch a success?
Investors were less impressed than engineers. Gary Black, co-founder of The Future Fund, called it “largely a bust” and said key deployment questions went unanswered. Tesla shares slipped 1.6 per cent in overnight trading after the event.
Regulators have their own questions. The Cybercab has no steering wheel or pedals. As a result, the US National Highway Traffic Safety Administration has opened an investigation into how Tesla certified it. Nevada has approved permits for up to 5,000 Tesla robotaxis around Las Vegas. Tesla’s engineers expect to field around half that this year.
What does this mean for the rest of the industry?
If Tesla can build a magnet motor with no rare earths at scale, every other carmaker will want to know how. The export shock of 2025 turned a long-term sourcing worry into an immediate one. A proven alternative would cut costs, shrink supply risk and loosen China’s grip on a critical component.
For now, the motor exists in one two-seat vehicle in one US city. Tesla hasn’t said whether it will reach the Model 3 or Model Y. It also hasn’t published the data behind its efficiency claim. Until it does, the Cybercab motor is a promising answer to a question the whole industry is asking.
