Drivers for Growth in Automotive Aluminum Demand Jack Pell and JD Rutt Hydro on behalf of The Aluminum Association, Aluminum Transportation Group (ATG)
The Aluminum Association’sAluminum Transportation Group (ATG) www.aluminumintransportation.org 2
Aluminum Growth Factorsto Consider:• Existing aluminum applications• Impact of federal regulations• Weight reduction and fuel economy improvement• Weight reduction and energy consumption• Benefits to alternative/electric vehicle technology• A future with automotive aluminum
50 Years of Uninterrupted Automotive Aluminum Growth 12% 11.3% 10.0% 10% 8.8% 394 7.8% Pounds 8% 6.9% 6.1% 334 6% 5.1% Pounds 4.5% 77 3.9% 4% Pounds 2.0% 2.1% 2% Historical Forecast 0%Calendar Year 1970 1975 1980 1985 1990 1995 2000 2005 2010F 2015F 2020F Aluminum Share as Percentage of Curb Weight Auto Aluminum Content North America - Percent of Curb Weight
Existing Aluminum Applications• Today’s vehicle contains about 10% by weight• Many vehicles in the U.S. fleet use 400-500 pounds of aluminum• More than 95% of automotive aluminum is recycled
Body Holds the Largest Weight Reduction Opportunity 12,000•Shift to aluminum saves Currently Aluminum 550 lbs. direct and 10,000 Aluminum Opportunity secondary weight KMT Aluminum 8,000 6,000•10% better fuel economy 4,000•No compromise to safety 2,000•No downsizing required 0•Better performance•Lower lifetime CO2 Source: The Aluminum Association 6
U.S. Faces Stricter Fuel Economy Regs• April 2010: the Obama Administration established regulation that, starting with 2012 model year vehicles, requires automakers to reduce fleet-wide greenhouse gas emissions by approximately 5% every year and strengthen fuel economy each year, reaching an estimated 34.1 mpg for the combined industry-wide fleet for model year 2016• October 2010: the Obama Administration announced next steps toward establishing tighter fuel economy and emissions standards for 2017 through 2025 model- year vehicles 7
Down Weighting Key to Solution • Weight reduction will be part of the solution to meet the new regulation bench marks – Nissan recently announced plans to start reductions at 15% – GM recently announced plans to trim 500 lbs. from its light trucks by 2016, and by the early 2020s, may cut as much as 1,000 lbs. per truck • Aluminum already offers great weight saving for less CO2 than competing materials 8
Weight Savings Translates to Fuel Economy Improvement Mass of Body-in-White Fuel Economy Improvement 400 3 2.7 MPG Miles per Gallon Improvement Kilograms 350 2.5 300 250 2 200 1.5 150 1 100 0.5 50 0 0 Steel (baseline) High Strength Aluminum Steel (baseline- High Strength Aluminum Steel Intensive Intensive 30 mpg) Steel Intensive IntensiveSource: ika - University of Aachen and the Source: The Aluminum AssociationEuropean Aluminium Association (EAA) calculated based on ika mass reduction data; assumes 23% secondary weight savings 9
Greatest Potential with Smallest CO2 Footprint• The aluminum industry has cut greenhouse gas factory emissions per ton of aluminum produced by 30% since 1990, and aims to be carbon neutral by 2030• Aluminum has lower life cycle CO2 emissions than steel or high strength steel• 20 lbs of CO2 is saved for every pound used Source: Magnesium Industry Life Cycle Study 10
Down Weighting Creates Value for Alternative Powertrains Percent Increase in MPG Cost per 1 MPG Increase 60.0% $300 50.0% $250 40.0% $200 30.0% $150 20.0% $100 10.0% $50 0.0% $0 Baseline Diesel Hybrid Baseline Diesel Hybrid Steel Body Aluminum Body Steel Body Aluminum BodySource: IBIS Associates 11
PEV and PHEV Study $3 Battery Cost Savings Per $1 Invested in Electric Vehicles Objective: • Evaluate the impact of vehicle weight reduction on electric vehicle performance, range and battery size Results: • Reduced battery cost: $900 - $1,950 (@ $750/KWh) • EV weight reduction potential: 19% • 10% mass reduction: 4 - 6% reduction in battery size • Expected aluminum structure cost premium: $630 20% reduced vehicle mass yields a 20% range increaseSource: Ricardo 12
Time for Down Weighting is Now • A necessity in the holistic approach to meeting U.S. and global regulations without sacrificing safety or functionality • The only fuel saving technology that complements advanced powertrains • Offers more CO2 and fuel savings than other materials • Transition can happen faster than alternative powertrain breakthroughs while preserving U.S. jobs
Drivers for Growth in Automotive Aluminum Demand Thank Youwww.aluminumintransportation.org
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