SHARES of China’s rare earth suppliers plunged Thursday (Mar 2) after Tesla said it will reduce its use of the minerals in future electric vehicles (EVs) to control costs.

The leading electric-car maker is designing a next-generation powertrain that will use a permanent magnet motor that does not rely on rare earth materials, said Colin Campbell, Tesla vice-president for powertrain engineering, at an investor meeting.

The change reflects Tesla’s efforts to control material costs and reduce its involvement in the health and environmental risks of mining the minerals, Campbell said.