French automaker Renault has quietly ended its joint project with supplier Valeo to develop a new rare-earth-free electric vehicle (EV) motor, opting instead to bring the work largely in-house while exploring cheaper component sourcing from China, according to two sources familiar with the matter who spoke to Reuters.
The move marks a significant shift for Renault, which had publicly framed the motor as an “innovation made in France” when it announced the collaboration in late 2023. The project, known internally as the E7A engine, was meant to symbolize Europe’s effort to reduce dependence on China for rare earth materials used in EV magnets — a crucial but politically sensitive part of the supply chain.
Instead, Renault is now preparing to buy the stator — the fixed part of the motor housing the rotor — from a Chinese supplier, the sources told Reuters.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026): big discounts for early bird.
Tekedia AI in Business Masterclass opens registrations.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab: From Technical Design to Deployment (next edition begins Jan 24 2026).
“The E7A engine project is no longer being done with Valeo,” one of them said. “It will be done entirely in-house across the entire value chain, except for the stator which could be bought from a Chinese supplier.”
A spokesperson for Ampere, Renault’s EV subsidiary, confirmed that a Chinese partnership was under consideration but said no final decision had been made.
“The process is still ongoing,” the spokesperson said, adding that Renault was also “studying the possibility of locating the stator in France.” Valeo declined to comment.
The decision to end Valeo’s involvement was driven primarily by cost reduction pressures, the sources said. As competition intensifies in the global EV market, automakers are under increasing strain to bring down production costs while maintaining margins. Chinese suppliers, with their economies of scale and state-backed efficiency in EV component manufacturing, reportedly offered far more competitive pricing than their European counterparts.
Renault’s pivot underscores a broader irony in the European auto industry, where even as governments and manufacturers push for supply chain independence from China, the country’s low-cost and advanced EV ecosystem remains indispensable.
Rare-earth dependence and China’s dominance
The development comes against the backdrop of growing tension over China’s control of global rare earths, critical materials for high-performance EV motors. Beijing currently accounts for 70% of global rare earths mining and 85% of refining capacity, giving it enormous leverage over industries dependent on the minerals.
In recent years, China has tightened export curbs on rare earth materials, prompting carmakers and suppliers in Europe, the U.S., and Japan to invest heavily in rare-earth-free technologies. Renault, General Motors, BMW, ZF, BorgWarner, and Valeo have all been developing motors that use alternative designs to eliminate the need for magnets made from rare earths such as neodymium and dysprosium.
Renault, for its part, has been using rare-earth-free motors since 2012, while Valeo’s contribution to the E7A project was focused on a new copper wire stator technology designed to boost efficiency and reduce energy loss.
“Made in France” — with a Chinese twist
Despite the potential Chinese sourcing, Renault says its “Made in France” commitment remains intact. The E7A motor will still be assembled at the company’s Cléon plant in northern France, using silicon carbide modules provided by Franco-Italian semiconductor manufacturer STMicroelectronics for the inverter — another key EV component.
The E7A motor is expected to deliver 200 kilowatts (kW) of power, roughly 25% more than current-generation Renault EVs such as the Scenic, and support an 800-volt charging system — twice the voltage of its current models. The new powertrain will feature prominently in Renault’s next generation of compact EVs, due to launch around 2028, forming part of a strategic roadmap to be unveiled in March by CEO Francois Provost.
While Renault pursues a Chinese-sourced stator, Valeo has continued developing its own magnet-free motor in partnership with German supplier Mahle. The “iBEE” motor, also due around 2028, is designed to deliver up to 350 kW of power and represents one of Europe’s most ambitious efforts to develop rare-earth-free propulsion systems at scale.
Europe’s EV balancing act
Renault’s shift highlights the broader challenge facing Europe’s automotive industry — the need to balance technological sovereignty with economic pragmatism. European automakers have vowed to reduce dependency on China for critical materials, yet China’s EV ecosystem remains both the most cost-efficient and most technologically advanced in key areas such as batteries, motors, and power electronics.
Renault’s collaboration with Chinese engineers on the new electric Twingo, developed in just two years, already demonstrated how dependent European firms have become on Chinese expertise in EV design and production speed.
The company’s latest move suggests that while Europe’s rhetoric champions self-reliance, its industrial strategy continues to rely on Chinese cost advantages to stay competitive in an increasingly crowded EV market.
By 2028, when the E7A motor is expected to power Renault’s next wave of compact models, the French automaker will likely stand as a case study in Europe’s uneasy compromise.