Rare-earth magnets are a messy part of the EV supply chain—and, some Canadian companies say, an area ripe for innovation. 

The market for rare-earth oxides is expected to grow fivefold by 2040, according to a recent report from Toronto-based consulting firm Adamas Intelligence, amid a rise not only in demand for electric vehicles, but for other booming technologies like wind turbines and cloud-computing centres. Magnets containing rare-earth elements like neodymium, combined with other metals, are prized for making highly efficient electric motors called permanent-magnet motors.