“Aluminum Cars Take Heat from ArcelorMittal’s CEO” – Wall Street Journal, 17 June 2014

Europe, China, and the US have all cracked down on fuel economy standards; President Obama has introduced new regulations to improve the average fuel economy by 54.5 miles per gallon by 2025. Automobile companies, like Ford, are responding to the new regulations by creating a new line of F-150 pickups made out of all-aluminum bodies, and many other US car manufacturers are following suit. However, Luxembourg-based ArcelorMittal, the world’s largest steel company, is an aluminum naysayer, contending that aluminum isn’t actually lighter than new designs of steel.

Due to US and European automotive companies’ move to aluminum, ArcelorMittal is now looking to expand and invest in developing economies, like China, Brazil, Mexico, India, and the Middle East, where steel is still heavily used.

According to Ducker Worldwide, 18% of vehicles will be produced entirely from aluminum by 2025, which will surely help the automotive industry to meet Obama’s proposed fuel economy standards. Though more expensive, aluminum is argued to be a lighter metal, which will thusly help to improve fuel efficiency; in the US, manufacturers’ fuel economies must increase by five percent each year until the 2025 mark. However, as ArcelorMittal presents, the flip side to manufacturing the same cars with all-aluminum bodies is to manufacture smaller cars out of steel, which was save the car industry the added expense of aluminum.

ArcelorMittal’s focus right now is on China, where it just opened VAMA, its first steel-manufacturing plant and a multi-million dollar undertaking with Hunan Iron & Steel Co. Through VAMA, the Chinese automotive industry will have access to 1.5 million tons of steel per year, an industry that has grown by 16% since 2013.

According to ArcelorMittal, the statistic that aluminum is 30% to 40% lighter than steel is only accurate if you’re equating aluminum to steel made in 2005. Steel produced in 2014 is harder and lighter than previous versions; current forms of steel have been refined using a distinctive heating and cool process. However, the Ducker Worldwide study still projects that a majority of automobiles will be manufactured out of aluminum parts by 2025.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

June 17, 2014

Phinix LLC

Copyright 2013. All rights Reserved by Phinix, LLC.

www.phinix.net    skdas@phinix.net

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2 thoughts on ““Aluminum Cars Take Heat from ArcelorMittal’s CEO” – Wall Street Journal, 17 June 2014

  1. The interesting thing here is that we have greenhouse gas (GHG) emissions regulations on motor vehicle operation (effectively, due to increasing CAFE fuel economy standards), and now likely on electric power production. But we don’t have emissions regulations on aluminum plants. So the steel industry can credibly argue that today’s environment unfairly advantages aluminum over steel, as accounting for the much higher emissions of aluminum production might make many decisions tilt back to steel.

    This means that the steel industry has a strong incentive to lobby for across-the-board GHG emissions regulations, e.g. Waxman-Markey, in order to maintain market share in motor vehicles. That said, I would have been surprised to see them actually doing that in a publication like the Wall Street Journal…

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