Last week Tesla Motors announced the production of its anticipated Model S. As many of us know, Tesla is an electric car, so we might immediately think that this could be good business for rare earth and lithium products. In this case, this could mean more business for the aluminum producers.The Aluminum Association highlights on its web site that this car has an ALL aluminum body. They share Tesla Design Director Franz von Holzhausen comment on why aluminum was chosen, “For limited or low-volume production cars like the Roadster, carbon fiber is a great material to reduce weight. It’s not a solution for higher-volume production due to cost and manufacturing time. For Model S, we are using aluminum for the body panels and chassis. Aluminum is as strong as steel but lighter in weight, and has similar manufacturing capabilities. Lighter weight translates directly to efficiency.”
It’s no surprise that ALCOA saluted the release of the car in their website. They highlighted that the car starts as a huge aluminum coil that weighs up to 20,000 pounds and that is used practically in all visible metal on Model S.
I think this is just the beginning of extensive use of aluminum in the car industry and that the right conditions are set for aluminum companies to regain value after a year of declining prices. The main reason is because more stringent fuel economy standards are being imposed worldwide. The Obama administration and several carmakers recently unfurled a new standard that will raise the average fuel efficiency of new cars and light trucks to 54.5 miles per gallon by 2025.
Aluminum weighs 40 percent less than steel and a lighter car goes further on a gallon of gas than a heavier one. In essence, weight is the third fuel. Also 60% of aluminum used in automobiles is from recycled aluminum that makes it very cost effective and environmentally friendly.
The race for more efficient cars is on, either power by electricity, natural gas, biofuels or gasoline; but the aluminum companies may be the winners in the end.