GM terminates contract with Vacuumschmelze
German magnet specialist Vacuumschmelze (VAC) first secured General Motors as a long-term US customer for permanent magnets used in electric motors in 2023. However, this collaboration has seemingly now come to an abrupt end.
Image: General Motors
As reported by _Reuters_, GM has terminated its long-term supply contract with eVAC Magnetics, the US subsidiary of Vacuumschmelze (VAC). Both parties are now reportedly embroiled in arbitration proceedings. The news agency cites official documents and a source ‘familiar’ with the situation.
The agreement signed in early 2023 between the US automaker and the German magnet materials specialist Vacuumschmelze (VAC) specifically involved a minimum ten-year supply of rare-earth permanent magnets for GM’s North American operations. Under the agreement, VAC committed to establishing a production facility in North America to manufacture permanent magnets for electric motors, intended for use in several GM electric vehicles starting in 2025. At the time of signing, the models explicitly mentioned included the Chevrolet Silverado EV, Blazer EV, and Equinox EV, the Cadillac Lyriq, as well as the GMC Sierra EV and Hummer EV.
However, it is clear that with the second term of President Donald Trump, the EV business in the US has progressed significantly more slowly than expected. This has also impacted General Motors’ previously established electrification plans. In a stock exchange announcement, GM stated that it had “terminated a strategic sourcing agreement” and is now involved in arbitration proceedings.
Additionally, VAC is currently in the process of being acquired by Energy Fuels. In June, Energy Fuels announced it would pay USD $1.9 billion for the acquisition of VAC. This would also transfer ownership of the new US plant, which, according to Reuters, has been operational in Sumter, South Carolina, since late 2025. The facility reportedly cost US$500 million and has an annual production capacity of nearly 2,000 tonnes. _Reuters_ states that 90 per cent of its output was sold to GM, with the remainder intended for the US market.
For VAC, the situation is critical: Energy Fuels has informed the news agency that there may be “potential adjustments to our purchase price of VAC depending on the outcome of the arbitration.” According to stock exchange documents, the dispute between GM and VAC first arose in April 2026. Energy Fuels has confirmed that it was at least aware of the conflict during negotiations for the acquisition of VAC.