Permanent Magnets Market Experiences US Tariff Impact | CAGR of 8.2%

Overview

New York, NY – May 05, 2025 – The Global Permanent Magnets Market size is expected to be worth around USD 76.8 billion by 2034, from USD 34.9 billion in 2024, growing at a CAGR of 8.2% during the forecast period from 2025 to 2034.

Permanent magnets are materials where the magnetic field is generated by the internal structure of the material itself. Inside atoms and crystals, you have both electrons and the nucleus of the atom. Both the nucleus and the electrons themselves act like little magnets, like little spinning chunks of electric charge, and they have magnetic fields inherent in the particles themselves.

The magnetic fields are pointing in all sorts of random directions and cancel each other out, and there’s no permanent magnetism. But in certain materials, called ferromagnets, all the spins and the orbits of the electrons will line up, causing the materials to become magnetic. Permanent magnets are limited by the structure of the material. And the strongest magnetic field of a permanent magnet is about 8,000 gauss.

The strongest magnets here at the Magnet Lab are 450,000 gauss, which would be almost 50 times stronger than that. Some permanent magnets are brittle and may break at high temperatures. For example, the maximum working temperature of Alnico magnets is over 540 °C (1,000 °F), the maximum working temperature of SmCo magnets and ferrites is about 300 °C (570 °F), and the maximum working temperature of neodymium magnets and soft magnets is about 140 °C (280 °F).

US Tariff Impact on Market

One crucial reason is China’s vast reserves of the raw materials used to make rare earth magnets. China has the largest reserves of rare earth minerals of any country in the world. China also produces more rare earths per year than any other country. China outproduces the second-largest producer, the U.S., by a factor of over 5 to 1.

Trump Administration Tariffs Affecting Magnets Enacted To Date:

• February 4, 2025: A 10% tariff is introduced
• March 4, 2025: An additional 10% tariff is levied
• April 3, 2025: Another 34% tariff imposed
• April 8, 2025: A new 50% tariff is implemented, raising the total to 104%
• April 9, 2025: Additional tariffs applied, raising the total to 125%
• April 10, 2025: The Trump administration issues additional guidance that the 125% figure for tariffs against China is totaled at 145% once 20% fentanyl tariffs are factored in.

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Further complicating matters, reciprocal trade actions by China on April 13, 2025, have restricted the flow of Rare Earth metals and magnets to the U.S. If this policy is prolonged, it will lead to shortages and inaccessibility of vital magnetic components to U.S. businesses and consumers. Additionally, on May 14th, 2024, the Biden administration announced a range of new tariffs on goods of Chinese origin. After review by the U.S. Trade Representative, these were finalized on Sept 13, 2024. These included a new tariff of 25% on all permanent magnets imported from China. This includes all rare earth magnets.

Key Takeaways

• Global Permanent Magnets Market is expected to be worth around USD 76.8 billion by 2034, up from USD 34.9 billion in 2024, and grow at a CAGR of 8.2% from 2025 to 2034.
• Ferrite magnets dominate the permanent magnets market with a 48.4% share due to cost-efficiency.
• The automotive segment holds a 36.3% share, driven by EV motors, sensors, and fuel-efficient components.
• In 2024, Asia-Pacific dominated due to manufacturing demand, reaching USD 18.1 Bn.

Analyst Viewpoint

The Permanent Magnet Sector offers compelling investment prospects, primarily driven by neodymium-iron-boron (NdFeB) magnets, which are vital for electric vehicles (EVs), wind turbines, and medical equipment. The global EV market is a key demand driver. Opportunities also exist in recycling technologies, as startups focus on recovering rare earths to address supply constraints.

Consumers are increasingly favoring sustainable, tech-driven products, boosting demand for magnets in EVs and smart devices. Each relies on high-performance magnets. Global consumers prefer eco-conscious brands, pushing manufacturers toward greener practices. Technologically, advancements in magnet miniaturization and thermal stability are enabling compact, efficient devices, from smartphones to aerospace components.

Report Scope

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Key Market Segments

By Type

Ferrite Dominates Permanent Magnets Market with 48.4% Share in 2024

• In 2024, Ferrite held a dominant market position, capturing more than a 48.4% share of the global permanent magnets market. This segment led the market due to its low cost, strong corrosion resistance, and wide usage across consumer electronics, automotive components, and household appliances.
• Ferrite magnets are commonly found in electric motors, loudspeakers, and microwave devices, where performance reliability matters more than compact size. Their demand remained strong throughout 2024, particularly from the automotive and electronics sectors in Asia-Pacific and Europe.

By Application

Automotive Segment Leads with 36.3% Share in 2024

• In 2024, Automotive held a dominant market position, capturing more than a 36.3% share of the global permanent magnets market. This leadership was mainly driven by the rising production of electric vehicles (EVs), hybrid cars, and fuel-efficient vehicles using magnet-based systems in motors and sensors.
• Permanent magnets are crucial in EV drivetrains, regenerative braking systems, and advanced driver assistance technologies. As countries pushed for cleaner transport and introduced subsidies to boost EV sales, demand for magnets in automotive applications increased notably across Asia-Pacific, Europe, and North America. Even in traditional combustion vehicles, permanent magnets remained essential in alternators, sensors, and fuel pumps.

Drivers

Electric Vehicle (EV) Boom is Driving Permanent Magnet Demand

• The growing adoption of electric vehicles (EVs) has become a key driving factor for the permanent magnets market. Permanent magnets, especially neodymium-based rare-earth magnets, are critical components in EV motors due to their ability to provide high torque and power density in a compact size. In 2024, as per the International Energy Agency (IEA). This rapid expansion is putting a direct and growing demand on high-performance permanent magnets used in electric drivetrains.
• Permanent magnet motors are widely preferred in EVs because they improve energy efficiency compared to induction motors. For example, Tesla’s Model 3 uses a permanent magnet synchronous motor (PMSM) to achieve better range and performance. According to data from the U.S. Department of Energy (DOE), electric motors used in EV powertrains are now permanent magnet types. This directly translates into higher consumption of neodymium, dysprosium, and other rare-earth materials.

Restraints

Supply Chain Instability of Rare Earth Elements is a Key Restraint

• One major challenge slowing down the permanent magnets industry is the unstable supply of rare earth elements (REEs). These materials, especially neodymium, dysprosium, and praseodymium, are essential for making high-strength permanent magnets used in electric vehicles, wind turbines, and electronics. But the problem lies in the limited number of countries controlling their supply. 
• This overdependence creates vulnerability in the global supply chain. Price fluctuations have become common due to geopolitical tensions and export restrictions. Such instability makes it difficult for magnet manufacturers and industries relying on permanent magnets to plan ahead or control production costs. It hits especially hard for countries with growing EV or wind energy markets but no domestic REE sources.

Trends

Development of Rare-Earth-Free Magnets is an Emerging Disruption

• One major emerging factor reshaping the permanent magnets industry is the active development of rare-earth-free magnet alternatives. With global concerns around the high cost, limited supply, and geopolitical risks of rare earth elements like neodymium and dysprosium, researchers and companies are now focusing on creating high-performance magnets without relying on these critical materials.
• In 2024, the U.S. Department of Energy’s Critical Materials Institute (CMI) announced a breakthrough in iron-nitride (Fe-N) based permanent magnets. These magnets show the potential to achieve magnetic energy levels close to neodymium-iron-boron magnets, without using rare earths at all. The DOE reported that Fe-N magnets could reach energy products, typical NdFeB magnets, showing promising progress.

Regional Analysis

APAC Dominates the Permanent Magnets Market with 52.0% Share, Valued at USD 18.1 Billion

• The Asia-Pacific (APAC) region is the undisputed leader in the global permanent magnets market, holding a commanding 52.0% share, with an estimated market value of USD 18.1 billion. This dominance is driven by strong manufacturing capabilities, high rare-earth mineral reserves, and booming demand from key industries like electric vehicles (EVs), renewable energy, and consumer electronics.
• China is the primary contributor. Japan and South Korea also play crucial roles, with leading magnet manufacturers like Hitachi Metals and TDK Corporation driving innovation in high-performance applications. The region’s EV sector is a major growth catalyst China alone selling, requiring massive quantities of permanent magnets for motors.

Recent Developments

• Shin-Etsu Chemical Co., Ltd. is a global leader in rare-earth materials. Shin-Etsu Chemical is a major supplier of high-performance neodymium (NdFeB) magnets. The company dominates the supply chain with advanced magnet production technologies and strong R&D capabilities. Its magnets are widely used in EVs, industrial motors, and electronics.
• TDK Corporation is a pioneer in magnetic solutions. TDK Corporation specializes in ferrite and rare-earth permanent magnets. Its products are critical for automotive, energy, and consumer electronics applications, including hybrid vehicles and hard disk drives. TDK’s strong focus on innovation and sustainability has led to energy-efficient magnet designs.
• Adams Magnetic Products Co. is a U.S.-based manufacturer. Adams Magnetic Products supplies custom permanent magnets for aerospace, medical, and industrial applications. Known for its flexible production capabilities, the company offers a wide range of magnet types, including alnico, samarium cobalt (SmCo), and NdFeB.
• Arnold Magnetic Technologies specializes in high-performance magnetic solutions. Arnold Magnetic Technologies serves the aerospace, defense, and automotive sectors. The company produces advanced rare-earth and alnico magnets, with a focus on extreme-environment applications. Its proprietary technologies enhance magnetic strength and thermal stability, making it a trusted supplier for mission-critical systems.

Conclusion

The Permanent Magnets Market is experiencing strong growth, fueled by rising demand from electric vehicles, renewable energy systems, and consumer electronics. Neodymium magnets dominate the sector due to their superior strength and efficiency, especially in EV motors and wind turbines. Asia-Pacific remains the powerhouse of production and consumption, led by China’s rare earth supply chain. While price volatility of rare earth materials poses challenges, recycling initiatives and tech advancements in magnet manufacturing are creating new opportunities.

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