VML General Comments - Chat, page-2196

The reference for the Nd substitution claim is based on my own work. Reading it again, I can see how it could cause some confusion because I only referenced Nd, whereas, I should have written NdO (Nd being the metal, NdO being the oxide).
To evaluate the substitution price for any metal (I've also done them for Nb and Mo), one has to take into account what the substitute costs both in terms of materials and performance. In this case, an induction motor is the substitute traction drive for an electric consumer vehicle.
An induction motor that would be used will weigh about 1/3 more than the PM (Permanent Magnet) motor therefore necessitating higher amounts of torque and power to move the extra mass. This requires more battery which then also adds weight and cost to the vehicle. Then the prices of all the components which would then make an apples to apples comparison are added up and the differences in the overall sum is the substitution value. One can then work that back through the magnetic value chain down to NdO pricing.
While the Lexus you refer to may use a total of 3kg rare earth magnets, the traction drive (about 1.2kg magnet) is the only part that is new to the equation these days as all the other magnets (doors, vents, seats, etc.) have already been using NdFeB for some time and will not be substituted back to Fe magnets due to design and weight issues.
You are very correct that in the end, it does not make a big difference in the overall cost of the car, unfortunately, the car makers do not see it that way and want to save every cent possible even if right now, the consumer is ready and willing to pay the extra costs. This is the struggle producers outside of China will have to try to get any extra value from their materials.