Toyota May Have Found a Way to Avoid Using Rare Earth Metals (TM, GM, HMC, MCP)

Researchers at Toyota Motor Corp. (NYSE: TM) have been able to develop a new type of motor for the company’s hybrid cars that does not include the use of the expensive rare earth minerals lanthanum, neodymium, and dysprosium.

The battery in a Toyota Prius now uses about 20 pounds of lanthanum and motor magnets use the other two rare earths. Lanthanum currently costs about $129/pound, about six times what it cost only a year ago.

Other carmakers like General Motors Co. (NYSE: GM) with its Chevy Volt, Honda Motor Corp. (NYSE: HMC) with its Insight, and Nissan and its all-electric Leaf could benefit from the new technology. Rare earth producers in China will feel the pinch, as perhaps will other rare earth miners like Molycorp Inc. (NYSE: MCP) and others in the US, Canada, and Australia that have yet to begin mining operations.

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