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A Caerphilly-based firm will lead a project to create a more environmentally-friendly motor for electric vehicles.

Research and development company Deregallera, which is based on Pontygwindy Industrial Estate, will work alongside Cwmbran-based firm Meritor and academics at Cardiff University as part of the project.

Wales’ Economy Minister, Vaughan Gething, confirmed the scheme had received £1.8m from the Ford Low Carbon Vehicle Transformation Fund, which is administered by the Welsh Government.

The project will see the firms design, develop and test a new low-carbon electric vehicle motor which uses fewer ‘rare earth’ materials, making them cheaper and reducing the impact on the environment.

While electric motors have been in use for decades, it is the permanent magnet motor which performs the best. However, nearly 85% of the world’s reserves of the special materials needed for permanent magnet motors come from China.

But there are concerns over the sustainability of distributing finite ‘rare earth’ materials around the world, as well as potential issues that could come about from relying so heavily on one country.

The Welsh Government has also said the project will help it towards achieving its net zero commitments.

Martin Boughtwood, Managing Director of Deregallera said: “Support from the Ford Fund will enable us to continue to work with electric powertrain experts at the Cwmbran-based firm Meritor and Cardiff University to design and test a new motor which uses less “rare earth” material than conventional motors, making them cheaper and minimising environmental and climate impacts.”

Economy Minister, Vaughan Gething said: “The Welsh Government is committed to building the new industries of the future here in Wales. These are the businesses that will create the new green jobs we need to secure a sustainable and prosperous Welsh economy.”

He highlighted recent high temperatures and continued: “As part of the action we’re taking, we’re committed to decarbonising our society, including developing transport systems that do not harm the environment.

“We need more electric cars, buses, and cleaner trucks on our roads. As a globally responsible nation, we also want to look after nature and make sure we do not squander finite global resources like ‘rare earth’ materials.”

Mr Gething said he wanted to see Welsh companies work with academics to find “innovative made-in-Wales solutions to global problems”. He added: “I am excited by the potential of this project to deliver an alternative vehicle motor that is sustainable. This could deliver significant benefits to our economy and our society.

“I am confident this will lead to the creation of new innovative, all-Welsh supply chains that will help power our economy long into the future.”

A spokesperson from the Ford Motor company added: “The Fund will provide a kick-start to two other low carbon vehicle projects in Wales, and we can’t wait to see what the next round of funding will bring.”

The Ford Low Carbon Vehicle Transformation Fund will open for a second round of applications on August 1.