GM cancels magnet supply deal with VAC South Carolina plant

General Motors has cancelled its long-term supply agreement for electric vehicle magnets with e-VAC Magnetics, the United States unit of Germany's Vacuumschmelze, and the supplier has taken the dispute to arbitration seeking damages, Reuters reported on Thursday, citing regulatory filings and a person familiar with the matter.

Why it matters: GM was set to take about 90 percent of the output of VAC's $500 million South Carolina plant, which has capacity of just under 2,000 metric tons a year, so losing its anchor customer tests a flagship Western attempt to build permanent magnet production outside China, which makes about 90 percent of the world's supply.

Data as of Reuters report by Eric Onstad, October 22, 2026, read in full via Investing.com; single source. The termination and arbitration rest on SEC filings by Energy Fuels and GM as Reuters summarised them, and on an unnamed person familiar with the matter confirming GM was the customer Energy Fuels did not name. Neither company commented on the arbitration. Developing item.

Energy Fuels, which agreed in June to acquire Vacuumschmelze for $1.9 billion, said in SEC documents filed last week that a customer of the South Carolina plant terminated its supply agreement on July 1 and that VAC launched arbitration proceedings against that customer several days later, and GM said in its own filing this week that a supplier had initiated arbitration against it after it terminated the agreement. The deal, signed in 2023, was for permanent magnets for electric vehicle traction motors, and VAC’s United States unit characterises the termination as wrongful. GM did not say in its filing why it cancelled.

Energy Fuels said it has no concerns about VAC’s commercial success and that there may be adjustments to its purchase price for VAC depending on the outcome of the arbitration. Reuters framed the cancellation against GM’s pullback from electric vehicles after the loss of federal incentives, including a $6 billion charge in January to unwind some electric vehicle investments.

GM cancels magnet supply deal with VAC South Carolina plant

Sources