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I know this has been discussed previously, but I could not find an authoritative source on this question, so I asked my customer advocate. Here is the reply directly from Tesla (received within less than 12 hours):

Tesla does not use rare earth metals in our battery or motor. Typically, rare earth metals apply to DC motors, which use magnets. One of the reasons we use an AC induction motor is it does not require magnets, which often contain the rare earth metals.

IMO this kind of information absolutely belongs up on the Model S Facts page. I wonder why it isn't.

With this information, I was also able to retrieve an old blog post from the Tesla website that deals with this topic. I thought I'd post it here, it is still worth reading although I don't know for sure if all of that information applies to the Model S in the same way it applies to the Roadster.
http://www.teslamotors.com/blog/induction-versus-dc-brushless-motors