Niron Magnetics and General Motors are forging a strategic partnership to develop the Minneapolis company's technology for use in electric-vehicle motors.

The venture funds of GM and Stellantis both are part of a new $33 million financing round for Niron, the companies announced Wednesday. The Shakopee Mdewakanton Sioux Community and the University of Minnesota, previous investors in the company, also both made new investments in the latest round and were joined by other investors.

Niron also has Volvo Cars Tech Fund as an investor.

Niron Magnetics is developing the Clean Earth Magnet, which can be made from iron nitride, a common element seen as more sustainable and less expensive than metals used in standard permanent magnets.

The goal: that the Niron magnet can improve energy efficiency of electric-vehicle motors, said Jonathan Rowntree, CEO of Niron Magnetics.

The development work will be done at both Niron and the General Motors facility, said Rowntree and Kai Daniels, principal with GM Ventures.

The standard permanent magnet is made with metal alloys known as rare-earth elements. The industry supply chain is largely concentrated in China. Niron's magnet can be made with elements found in the U.S.

"It's critical for us to develop our EV supply chain and make sure that we have a North American-based presence in doing that," Daniels said.

The funds will help Niron expand its production facilities and work to commercialize the product.

"We were drawn to invest in Niron by the impressive sustainability benefits that its Clean Earth Magnet technology offers for vehicles and the inherent scalability of their solution," said Adam Bazih, managing partner at Stellantis Ventures, in a statement.

The Volvo Cars Tech Fund was an investor in a $21.3 million financing round in 2021.

Niron's magnets can also be used in consumer electronics, industrial motors and wind turbines.

The company, which spun out of a University of Minnesota research lab in 2013, is based in northeast Minneapolis and has 60 employees.

A year ago, Niron secured a $17.5 million grant from the U.S. Department of Energy's Seeding Leading Energy technologies with Untapped Potential (SCALEUP) program.

Last month, Time magazine named the Clean Energy Magnet to its "Best Inventions of 2023" list.

"GM invented rare earth permanent magnets nearly 40 years ago, and now we're working together to bring the next generation of automotive magnet technology to market," said Rowntree in a statement. "We think that our Clean Earth Magnets can help GM in its goal to put everyone in an EV."