In a Nutshell: What You Need to Know About Steel and Aluminum in Auto
The “battle” between steel and aluminum is heating up, with both sides volleying for the attention and funding of the auto industry.
Here’s a high-level view of what you need to know:
Legislation: In 2012, the Obama administration announced stringent new CAFE (Corporate Average Fuel Economy) standards for all automakers. Broken into two phases, manufacturers are required to at least target the following:
– Phase 1: 34.1 MPG by 2016
– Phase 2: 54.5 MPG by 2025
Weight: Although auto manufacturers are developing new engines, transmissions and technologies, steel and aluminum come into play in terms of vehicle weight. Reducing weight has become the low hanging fruit, and as of right now, aluminum weighs considerably less than steel.
Presence: Aluminum has always been present in the auto industry, but has historically represented a negligible percentage of vehicle assembly. Ford announced early this year, however, that the new F150 would have all body/exterior components, or “the skin,” made of aluminum.
This was a gutsy move considering it’s their best-selling vehicle, not to mention the best-selling vehicle in the country. They claim a 700-pound weight savings benefit. Outside of luxury manufacturers like Audi, this was the first official/advertised example of mass use of aluminum from an auto company such as GM, Ford, Chrysler or Honda.
High-Strength Steel: While there was already previous pressure to lighten steel material, the pace has only increased. More and more advanced high-strength steels (AHSS) are being developed, and some grades claim to be the same strength as current steel grades, with a 60% weight reduction. The steel industry’s goal is to meet the lightweight benefits of aluminum through advancements in steel technology.
Construction: Steel is easier to work with, and auto manufacturers know how to use it. Any change over to aluminum requires a re-tooling of all manufacturing lines and re-education of an entire workforce. That’s not to say anything of the downstream effects at places such as dealerships.
Costs: Aluminum, on average, costs more than twice that of steel today. Manufacturers may find difficulty in passing along the added to cost to already sensitive buyers. This doesn’t include the added capital required to change over lines, train employees, etc.
Supply: There’s currently not enough capacity in the US to support a significant shift to aluminum. Even if the current global aluminum mills provided nothing to other markets, capacity would have to double to support the equivalent volume supplied by steel today.