L&G makes £23m investment into sustainable motor manufacturer

Written by Michael Griffiths

20/11/2023

Legal & General has invested £23m into Advanced Electric Machines (AEM), a provider of sustainable motor manufacturing primarily for the automotive industry.

The funding will be used by AEM to scale up production capacity at its facility in the North East, deliver on growth plans to establish a global sales footprint, as well as bolster its R&D capabilities.

L&G confirmed that it led the Series A funding round alongsideBarclays Sustainable Impact Capital with significant additional investment from Par Equity. Other investors included Northstar Ventures, the Low Carbon Innovation Fund 2 and Turquoise Capital LLP.

AEM’s motor technologies remove the need for polluting rare earth metals in electric vehicle (EV) motors, the production and processing of which is concentrated in China. By eliminating rare earth permanent magnets, costs as well as reliance on geographically concentrated supply chains are reduced, and recyclability and environmental footprint of the motor is significantly improved.

“L&G Capital invests in innovative businesses with the potential to accelerate progress to a low-carbon economy,” commented managing director clean energy strategy and investments at L&G Capital, John Bromley.

“AEM’s technology provides a sustainable, market-leading solution capable of eliminating the need for rare earth materials, thereby reducing emissions and supply chain risk. The UK has a long and successful history in cutting edge automotive technologies and by co-leading this investment, we are supporting AEM to fulfil its potential to create skilled jobs and generate global export revenues.”

CEO and co-founder of AEM, James Widmer, said: “Today’s funding announcement clears our path to sustainable growth for years to come. It is a vote of confidence from the market in our vision, our technical capabilities and our mission to rid EV motors of harmful and problematic materials. Everyone at AEM and our new partners are excited for the role we are now able to play in making the electric vehicle sector truly sustainable.”

The move will see head of principal structuring and investments at Barclays, Steven Poulter, join the AEM board, and he added: “AEM is solving a fundamental constraint of the EV market – the reliance on rare earth metals for motors – which causes significant cost and supply chain challenges.

“By producing motors that don’t rely on these metals, AEM is able to remove the key barriers to the production and subsequent adoption of EVs. We are excited to be supporting AEM on the next stage of its journey as it expands into passenger vehicles, a growing market critical to the energy transition.”

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