British electric motor developer Advanced Electric Machines (AEM) has signed a development partnership with one of the world’s largest automotive suppliers, marking a significant step forward for the Newcastle-based startup after a period of financial strain. The deal, reportedly valued in the seven-figure range, is expected to accelerate the company’s efforts to commercialize its rare-earth-free electric motor technology.
Founded in 2017 as a spin-off from Newcastle University, AEM focuses on designing electric motors that eliminate the need for permanent magnets and rare earth materials such as neodymium and dysprosium. Instead, its motors are built using recyclable and widely available materials like steel and aluminium. This approach aims to lower costs, reduce environmental impact, and improve supply chain security at a time when access to critical raw materials remains uncertain.
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The company’s technology also seeks to move beyond the use of copper, which remains common even in magnet-free systems such as asynchronous and separately excited synchronous motors. AEM argues that removing these materials further enhances recyclability and sustainability. The firm’s latest motor, intended for passenger vehicle applications, is scheduled to enter series production by the end of the decade under the new collaboration.
While AEM has not disclosed the identity of its new partner, the group reportedly generates annual revenues in the tens of billions of euros. The company’s financial performance has fluctuated in recent years, with revenue dropping from £5 million in 2022 to £2.2 million the following year before recovering to £2.9 million in 2024. Losses widened to £8.3 million after the collapse of a major customer, Tevva Electric Trucks.
Despite past challenges, AEM appears to be regaining momentum. Alongside the latest partnership, the firm recently secured a contract with a major German commercial vehicle axle manufacturer. Chief Executive James Widmer told The Times that the company’s technology has “millions of kilometres of use” and demonstrated that “it outperforms what we’re replacing,” underscoring AEM’s belief that its rare-earth-free systems can compete with conventional motor designs.