Automotive Aluminum Demand Growing: What It Means for Tier Ones

Aluminum Supplier Novelis to build $300 million sheet manufacturing facility in Kentucky

Aluminum is trending up in automotive, according to a 2017 Ducker Worldwide survey. The survey projects that aluminum content in North American passenger vehicles, particularly light trucks and SUVs, will increase 42 percent from its 2015 level by the year 2028. We’re already seeing the material popping up more and more in industry news, from the infamous 2015 Ford F-150 to the latest Chevy Silverado’s aluminum hood, doors and tailgate, and Tesla’s all-aluminum bodies on the S and X models.

“Aluminum is a growing material of choice for the automotive industry worldwide as auto manufacturers continue to demand more and more aluminum to produce lighter, safer and stronger cars, trucks and SUVs,” said Steve Fisher, president and CEO of Novelis, a leading producer of flat-rolled aluminum products.

Aluminum on the Market

The commodity price of aluminum seems to reflect this trend. In January 2014, the month the first all-aluminum Ford F-150 was announced, aluminum’s price hovered at $1,750 per metric ton before plummeting to the low $1,500s around the end of 2015. Commodity aluminum has been steadily climbing since, trading today at $2,250 per metric ton, up 25 percent over the past year.

Aluminum prices steadily rise. (Image courtesy of

Aluminum prices steadily rise. (Image courtesy of

Aluminum in the Automotive Industry: Insights from a Supplier

I spoke with Ganesh Panneer, Novelis vice president and general manager of the automotive division, about the company’s recent third-of-a-billion-dollar investment in automotive aluminum manufacturing, the larger trends in aluminum and what it could mean for tier one automotive suppliers.

So, what makes aluminum so ideal for automotive applications?

Aluminum is lighter, safer and far more sustainable than any other metal material on the market. It also has secondary performance benefits.

Aluminum is one-third the density of steel, enabling very effective lightweight solutions for automotive parts compared to steel. For example, the Ford F-150 on the road today is about 700 pounds lighter than the previous model. So, there’s significant weight savings that can be achieved.

In terms of safety, aluminum absorbs energy about twice as well as steel, making it quite safe for automotive applications. In fact, every aluminum bodied vehicle ever crash tested by U.S. federal regulators has a five-star safety rating.

From a sustainability standpoint, aluminum is fully recyclable. We at Novelis operate a closed-loop recycling system—we take scrap back from our plants and feed it right into our recycling systems, using that material to build good aluminum sheet.

From a performance standpoint, lighter vehicles tend to drive better, and sometimes you can translate the weight savings into payload capacity. There are several secondary benefits like that.

Passenger vehicles have been around for a long time, and aluminum isn’t exactly new, either. Yet, aluminum is trending up in the industry. Why now?

There are a few key trends driving the growth of aluminum in this industry:

1.       Vehicles are getting bigger. As vehicles get bigger, automakers must make advancements to keep them fuel efficient. In addition, government regulations are driving toward higher fuel economy requirements. That is certainly helping as well.

2.       Vehicles are getting heavier. Consumers want electronic systems, entertainment systems, Standard ABS, peripheral vision systems, cameras, and other bells and whistles, which all add weight. When you add weight to the vehicle, you need to take weight out somewhere else. That’s how consumer preference drives the evolution of vehicle production.

3.       The electric vehicle (EV) market is growing. In the EV market, the biggest factor that drives consumer preference is range. To achieve a high range for a given battery size and weight, you need to lightweight the body. That’s why most EVs you see today are all-aluminum. These batteries are expensive. So, for the same battery cost, you can get more range if you lightweight your structure.

Novelis is building a $300 million facility in Guthrie, Ky. What sorts of jobs are being created?

In the mix there are process engineers because we are going to be heat-treating aluminum coils, which is a proprietary process. There are also opportunities for electrical engineers, automation engineers and mechanical engineers.

If I’m an automotive parts supplier, how might this affect my business?

Tier one suppliers, particularly those involved in supplying body panels to original equipment manufacturers (OEM), have to get used to working with aluminum. It’s different from steel. As aluminum adoption in the industry grows, more and more tier ones are getting used to processing aluminum within their stamping plant.

This conversion takes some familiarity. Novelis, as an aluminum supplier, has a significant field technical workforce helping tier ones come up the curve getting used to aluminum.

In general, what aluminum alloys are most popular in this sector?

I would say the 6000 series of alloys. They’re primarily used for skin applications, body structural applications, B pillar, A pillar, cross members and so on. These alloys exhibit the energy absorption properties I mentioned.

What does the future hold for the battle of aluminum vs. steel?

When you look at the future of body design, the multi-material approach is going to be the future as we see it. This means a mix of aluminums, steels, and other plastics and composites. In this multi-material world, aluminum is going to be the predominant material for lightweighting. Of course, high-strength steel has its applications, but there are many areas, especially in body-in-white, where aluminum has advantage—and we intend to keep it.

The aluminum body of the 2015 Ford F-150. (Image courtesy of Ford.)

The aluminum body of the 2015 Ford F-150. (Image courtesy of Ford.)

Novelis Investing $300M in New Aluminum Manufacturing Facility

Novelis recently announced plans to build an approximately $300 million automotive aluminum sheet manufacturing facility in Guthrie, Ky. The greenfield facility, with an annual nameplate capacity of 200,000 metric tons, will include heat treatment and pre-treatment lines, which prepare aluminum for use in vehicle parts such as body-in-white, hoods, doors, lift gates and fenders. The company expects to break ground in early spring and create approximately 125 jobs at the new facility, which is slated to open in 2020.

The new facility will be near Logan Aluminum, a Novelis joint venture in Russellville, Ky., and several nearby automotive manufacturing plants.

 (Image courtesy of Novelis.)

(Image courtesy of Novelis.)

More than 200 vehicle models on the road today are built with aluminum. Several major automakers including FCA, Ford, GM, Jaguar Land Rover and Toyota are supplied by Novelis.

For more on the trend toward automotive aluminum, check out Is the New Aluminum the Death of Automotive Steel?