Electric vehicles are at the heart of the clean‑energy transition, but the latest Energy Technology Perspectives 2026 report from the International Energy Agency (IEA) shows that the technologies behind them still rely on fragile, highly concentrated supply chains. Batteries, power electronics and electric motors are increasingly strategic components – and any disruption in their supply can quickly ripple through the entire automotive sector.
According to the IEA, today between roughly 60% and nearly 100% of each step of the battery manufacturing chain is located in a single country, China. A similar pattern exists for key materials used in traction motors: refining of rare‑earth elements and the production of permanent magnets are overwhelmingly concentrated in China, and capacity outside the country could cover less than a quarter of demand if Chinese exports were suddenly unavailable. Recent export controls on rare‑earth‑containing magnets have already forced some motor and machinery manufacturers outside China to pause production, underlining how exposed current designs are.
To map these vulnerabilities, the report uses an “N‑1” test borrowed from power‑system planning. It asks a simple question: how much demand could still be met if the largest exporter in a given supply chain step disappeared? For all the major clean‑energy technologies assessed – including electric vehicles – there is at least one step where, without that largest exporter, less than one‑quarter of demand could be served. In other words, a single weak link can threaten the resilience of the whole chain.
The IEA’s conclusion is that countries and industries need more than just new factories; they need smarter designs and more efficient manufacturing. For batteries, the report estimates that improving manufacturing efficiency and securing more competitive components could cut European production costs by about one‑third, closing most of the cost gap with China. Similar principles apply to drivetrains: designs that use fewer constrained materials, are easier to automate, and can be built competitively in several regions are likely to be favoured by policymakers and OEMs.
This is exactly the context in which modular axial‑flux motors can play a role. Compared with conventional radial‑flux machines, axial‑flux designs can offer higher power density and greater flexibility in how the active parts are arranged. A modular architecture based on repeatable stator and rotor segments can simplify manufacturing, support higher levels of automation and make it easier to scale production capacity in different regions close to vehicle plants. If such designs are also optimised to reduce rare‑earth content – or to operate with alternative magnet and material options – they can directly address some of the supply‑security concerns highlighted in the IEA’s analysis.
Anchoring axial‑flux innovation in this broader supply‑chain perspective strengthens the case for investment. It shows that new motor platforms are not just about performance gains on paper; they are also tools to diversify technology choices, lower dependence on constrained materials and support more geographically balanced EV manufacturing. In the world described by Energy Technology Perspectives 2026, that combination of efficiency, flexibility and resilience is likely to be decisive for the next generation of electric drivetrains.