As a global leader in the electric vehicle market, Tesla's plan for zero rare earth permanent magnet motors, if successful, could have a significant impact on the rare earth market—particularly China's rare earth monopoly.

"As the world transitions to clean energy, the demand for rare earths is really increasing dramatically, and not only will it be a little harder to meet that demand, but mining rare earths has environmental and health risks," said Colin Campbell, VP of Powertrain Engineering at Tesla.

"We have designed our next drive unit, which uses a permanent magnet motor, to not use any rare earth materials at all," he announced.