Aluminum To Negatively Impact Extent Of Steel Application In Automotive Industry

by Trefis Team
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Aluminum is a metal with diverse industrial applications, including an increasing scale and scope of applications in the automotive industry. Aluminum is a lighter industrial metal as compared to steel, which has traditionally been the most extensively used metal in automotive applications. Advances in material science as well as automakers’ need for reducing the weight of their automobiles has driven the rising applications of aluminum in the automotive industry. In this article, we will look at the rising usage of aluminum in automotive applications and the implications of this for steel.

The Case For Greater Aluminum Applications In The Auto Industry

Regulatory requirements pertaining to fuel efficiency regulations have forced automakers to innovate. The federal government’s Corporate Average Fuel Economy (CAFE) standards envision a near doubling of average automobile fleet efficiency from 27.5 miles per gallon in 2012 to 54.4 miles per gallon in 2025. [1] The stringent demands of regulatory authorities have driven auto companies to improve the fuel efficiency of their engines. However, improvements in internal combustion engine technology alone are unlikely to translate into the desired improvement in automobile fuel efficiency demanded by regulators. Thus, car makers have been trying to lower the average weight of their vehicles by partially substituting steel with lighter materials. This has allowed for a greater application of materials such as aluminum, magnesium, and plastic composites in automobiles.

Steel accounted for close to 60% of the weight of the average North American automobile till recently. ((Sustainability and Steel in Automotive Applications, American Iron & Steel Institute)) However, the share of aluminum is expected to rise going forward and eat away at the share of steel. As per a study by consulting firm Ducker Worldwide, the share of aluminum in the average North American lightweight automobile is set to rise to 16% (565 pounds per vehicle) in 2028 from around 10.4% (397 pounds per vehicle) in 2015. [2] Since aluminum is lighter than steel, its share by volume would rise by an even greater amount.

Implications For Steel

So, how does the increase in the share of aluminum affect the application of steel in automotive applications? Based on the estimates mentioned previously, the average North American lightweight automobile would weigh approximately 7% less in 2028 as compared to 2015. If we assume that the share of steel in the average North American automobile declines only as a result of an increase in the share of aluminum (around 600 basis points) between 2015 and 2028, and we also factor in a 7% decline in the weight of the average light automobile, the pounds of steel used per vehicle would decline by around 10%. If we factor in a likely increase in the application of plastic composites, it would lead to an even greater decline in the extent of application of steel in automotive applications.

Thus, driven by higher fuel efficiency requirements, the automotive industry offers a potential avenue for higher aluminum application. This is expected to benefit aluminum producers such as Alcoa going forward.

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  1. Steelmakers Must Step On Gas To Keep Car Work, Financial Times []
  2. Unprecedented Growth Expected For Automotive Aluminum As Multi-Material Vehicles Ascend, New Survey Of Automakers Says, Ducker Worldwide []
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