In Detroit, Stuttgart and Birmingham – and in the other hubs of the world’s automotive industry – aluminium is taking on a new shine. Vehicle manufacturers are increasingly turning to this light, strong and corrosion-resistant metal as a way to solve two of the auto industry’s biggest challenges: how to improve vehicle fuel efficiencies and reduce greenhouse gas emissions.

Regulation is a major driver of the change, with stricter limits being imposed for vehicle fuel economy and carbon dioxide (CO2) emissions. Automakers are exploring a number of ways to meet the new standards, including advances in power train (engine and transmission) technology, aerodynamic design, tyre resistance and air conditioning systems, and – of most interest to the aluminium industry – reduction in vehicle weight.

The use of one kilogram of aluminium to replace heavier materials in a car or light truck can save a net 20 kilograms of carbon dioxide over the life of the vehicle. And for every ten per cent reduction in the weight of a vehicle, fuel economy improves by seven per cent.

We have reached the tipping point for how cars and trucks will be made for decades to come, and this represents a significant opportunity for Rio Tinto

Jim Dickson, director, Global Automotive Strategy, Rio Tinto Aluminium

The auto industry has been researching aluminium for over 30 years, and the metal is increasingly helping vehicle manufacturers keep pace with today’s stringent new standards. The auto sector now promises to be the most important growth segment for aluminium demand since the advent of the aluminium beverage can half a century ago.

“Demand growth from the car companies is now expected to be exponential compared to the packaging market,” said Jim Dickson, director, Global Automotive Strategy for Rio Tinto Aluminium. “In terms of aluminium, we have reached the tipping point for how cars and trucks will be made for decades to come, and this represents a significant opportunity for Rio Tinto.”

Aluminium’s unique properties are driving greater penetration into the automotive market. Once reserved for low volume and premium vehicles, the metal is now clearly making its way to the higher volume vehicle segments, thanks to its light weight, strength and resistance to corrosion. Aluminium can also help vehicles improve their handling and, through the energy absorption properties of high strength alloys upon impact, their safety ratings. It is also infinitely recyclable.

Definitions: automotive
aluminium

Definitions: automotive
aluminium

Closure sheet: used for the lids of bonnets and boots (or “hoods” and “trunks” in US English), doors, floors, roofs and wings (“fenders” and “quarter panels”).

Closure sheet: used for the lids of bonnets and boots (or “hoods” and “trunks” in US English), doors, floors, roofs and wings (“fenders” and “quarter panels”).

Extrusions: used for structural members, including chassis, suspension and sun roofs.

High pressure die castings: used for suspension components and engine cradles.

Image: Ford's F-150 has been the best-selling vehicle in the US for 37 years. Image courtesy of Ford.

While consumers are demanding higher fuel efficiency, they also want manufacturers to incorporate more technology and comforts into the vehicles they buy. These, however, add weight. The increased use of aluminium can help offset this added weight, and enable manufacturers to increase their profit margin on the technology that consumers expect in modern vehicles.

Global growth

Research firm Ducker Worldwide forecasts that seven out of ten pick-up trucks produced in North America will be “aluminium intensive” by 2025.

This forecast has been driven by the highly successful launch of the 2015 Ford F-150, the first high-volume vehicle to be built with an all-aluminium body. The F-150 has effectively set a new standard for this segment of the industry, and other manufacturers are expected to follow Ford’s lead.

20kg

of carbon dioxide saved per kg of aluminium used

The F-150 has been the best-selling vehicle in the US for 37 years, and the best-selling pick-up for the last 30. The 2015 design incorporates 287 kilograms of additional aluminium compared to the 2014 model. Sales of the vehicle are forecast to reach 700,000+ units in 2015.

Peter Friedman, senior manager of Ford’s Manufacturing Research department, explained that the company’s decision to use increasing quantities of aluminium is connected to an evolution in the types of alloys now available, which are higher in strength and more joinable. “Body construction methods have improved, and our ability to join and create very strong, stiff structures using aluminium has improved drastically over time,” he added.

Shifting to Europe, Ducker estimates that European original equipment manufacturers (OEMs) will steadily grow their use of aluminium body and closure sheet to 476 thousand tonnes by 2020 compared with 126 thousand tonnes in 2012. They also expect a steady increase in demand for extrusions and high pressure aluminium die castings throughout the same period.

On average, in Europe, Ducker forecasts an increase in aluminium usage of 43 kilograms per vehicle by 2025. While this might seem quite modest, the European market is well ahead of North America in its adoption of more fuel efficient and lighter weight vehicles.

“We also think a turning point for aluminium demand in the European auto market is likely to come from its increasing adoption in smaller vehicles,” said Roland Dubois, director, Global Strategic Marketing for Rio Tinto Aluminium. “Although the usage per vehicle is less in these smaller models, the number of units is potentially much higher.” China is another fertile market for aluminium demand in the automotive sector. According to market research company IHS Global, light vehicle production in China is expected to grow at a compound annual growth rate of nearly six per cent to 2021, representing huge potential demand for aluminium.

CAFE culture

CAFE culture

Perhaps the most high-profile regulatory push affecting vehicle fuel efficiency has been from the tightening standards in the US.

Perhaps the most high-profile regulatory push affecting vehicle fuel efficiency has been from the tightening standards in the US.

In 2012, the Obama Administration finalised groundbreaking standards that will increase corporate average fuel economy (CAFE) for cars and light-duty trucks to 54.5 miles per gallon (mpg) by 2025, almost twice the level at the time of the announcement. In line with improvements in fuel economy, emissions will need to decrease to 163 grams of carbon dioxide per mile.

CAFE standards were enacted by Congress in 1975, to reduce energy consumption by increasing the fuel economy of cars and light trucks. The standards are fleet-wide averages that must be met by each automaker for its car and truck fleet, each year.

CAFE standards are regulated by the US Department of Transportation’s National Highway Traffic and Safety Administration (NHTSA). NHTSA sets and enforces the CAFE standards, while the Environmental Protection Agency (EPA) calculates average fuel economy levels for manufacturers, and also sets related standards for greenhouse gas emissions.

Image: CAFE standards were introduced by US Congress to increase the fuel economy of cars and light trucks.

Collaboration between Rio Tinto’s Research and Development group and world-class academic institutions has also enhanced the company’s abilities to meet the growing requirements of the automotive sector.

General Motors’ first electric car, the EV1, was based on Alcan’s aluminium vehicle technology. And Ford’s P2000 project back in 1987, which led to the aluminium-intensive Mercury Sable, was based on significant effort between the two companies.

Rio Tinto Aluminium continues to promote its technical expertise and product offering to enhance the aluminium innovation that the car companies expect, both for today and for the future. Working with its direct customers, such as aluminium extrusion manufacturers, and through enhanced collaboration with the OEMs, Rio Tinto has honed its strategy for the automotive sector, to continue differentiating itself from its competitors.

“We work with the client and define their specific technical needs,” says Nick Parsons, senior scientist, Product Metallurgy for Rio Tinto Aluminium. “Our team of experts helps them improve their process, make their process more efficient, and meet the challenges of the automotive market.”

As well as helping the customers reduce cost and increase productivity, the collaboration can help them develop new products and access new markets.

“We form partnerships with our customers to develop innovative and tailor-made alloys,” adds Jerome Fourmann, technical manager, Billet & Foundry Products, North America. “By providing our customers with alloys that have higher mechanical properties, they’re able to develop thinner profiles that can contribute to making cars lighter.”

Can Art Aluminum Extrusion Inc. is one such customer, with which Rio Tinto has been working for more than 20 years. “Rio Tinto has made itself available to our operations whenever we need support for new programmes,” said Can Art’s president and chief executive, Robert Saroli. The two companies have worked together developing new extrusions specifically for the automotive market. “This has allowed us to achieve success on platforms such as the F-150,” he added.

~80%

of Rio Tinto Aluminium's power needs come from non-fossil fuel sources

Almost 80 per cent of Rio Tinto Aluminium’s total power needs came from non-fossil-fuel sources in 2014, compared with an industry average of 35 per cent. This means that the emissions intensity from the group’s smelters is around half of the industry average – less than six tonnes of CO2 equivalent per tonne of aluminium versus an industry average of around 11 tonnes.

ASI’s mission is to deliver the first comprehensive global standard for the responsible production, use and re-use of aluminium. After a year-long development effort, the ASI Standard was unveiled in December 2014. It aims to improve the industry’s environmental, social and governance performance throughout its entire value chain, including plans to reduce its greenhouse gas emissions. Once implemented, it will help companies achieve greater efficiencies and transparency, while improving their social and environmental performance. End-users such as Audi, BMW Group and Jaguar Land Rover have already indicated their intention to buy certified aluminium as soon as it is available.

A highway to value

So buckle up. The momentum that's building for the intensive use of aluminium in automobiles, among many new developments in other fields of transportation, is helping drive robust global demand projections for primary aluminium – in the order of around four per cent compound annual growth to 2030.

For Rio Tinto Aluminium, as it works with its customers to improve their processes and develop customised, high-performance alloys, the automotive market offers a clear highway to creating superior value for the business.