Hybrid vehicles, which combine a gasoline engine and electric motor for better mileage, have gone mainstream in many developed countries but procuring a steady supply of rare earth elements such as dysprosium and terbium has been a challenge.
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Automakers have been trying to diversify their source of the materials to ease their dependence on China, which had in 2010 imposed a temporary, de facto ban on exports of rare earth minerals to Japan as the two nations engaged in territorial disputes.
Honda, Japan's third-largest automaker, said on Tuesday the technology, developed with Daido Steel Co Ltd, will be used in the next Freed minivan to be unveiled this autumn.
The redesigned motor still uses the light rare earth element neodymium, which can be found in North America and Australia, in addition to China.
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Honda is aiming for new-energy vehicles, including gasoline-electric hybrids, plug-in hybrids, battery-electric and fuel cell vehicles to account for two-thirds of its line-up by 2030, from around 5 percent now.
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