Advancing Growth 2015 North American Light Vehicle Aluminum Content Study Executive Summary June 2014
2015 Key Findings In 2015: Pickup trucks will contain the most aluminum at 548.9 lbs. per vehicle, followed closely by E Segment sedans at 546.9 lbs., SUVs at 410.3 lbs. and minivans at 396.5 lbs. All other segments will be below the average content of 394 pounds per vehicle. Tesla, Mercedes, BMW and Ford will all exceed the average aluminum content and the average aluminum share of curb weight. The F-150 will contain 1,080 pounds of aluminum. Aluminum sheet and extruded products for the body and closures are over one half of this content. The total aluminum content for the 17.46 million vehicles of expected production will equal nearly 7 billion pounds. Body and closure parts will be 11% of the total. Total North American light vehicle aluminum consumption will increase by 28% in 2015 over 2012. Consumption will surpass all records set in previous decades by one billion pounds. Aluminum hood penetration will increase from 34% in 2012 to 48% in 2015. More than 500,000 pickup trucks and EV s (a combined total) will have complete aluminum bodies, and have a content of over 500 million pounds of aluminum. 2
2025 Key Future Projections Within the Decade: Seven out of 10 new pickup trucks produced in North American will be aluminum-bodied. Every leading automaker will have an aluminum body program in place. Ford, General Motors and Fiat Chrysler will be the biggest users of aluminum sheet. Aluminum hood penetration will reach 85% and doors will reach 46%; complete bodies will reach 18%, from less than one percent today. This will drive total aluminum content to 547 pounds per vehicle. The total North American aluminum content will be 10 billion pounds. Aluminum will comprise more than 75% of pickup truck body and closure parts, 24% of E Segment body and closure parts, 22% of SUV body and closure parts and 18% of minivan body and closure parts. Aluminum sheet for light vehicle body and closure parts will grow from less than 200 million pounds in 2012 to nearly 4 billion pounds. On a volume basis, 26.6% of all the body and closure parts will be made of aluminum. The gross weight savings from aluminum body and closure use will be 175 pounds per vehicle. Globally, light vehicle aluminum content will approach 35 billion pounds, making light vehicles the most important global market for aluminum. 3
Aluminum content will break with the long term 40 year trend line in 2015 as aluminum penetration for body parts, doors and closures (other than hoods) finally reaches the critical mass for an explosive period of growth from 2015 to 2025. Net Pounds per Vehicle 450 400 350 300 250 200 150 100 Net Aluminum Pounds per Light Vehicle 350 394 50 0 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Calendar Year 4
Large content increases for body parts, closures and larger transmission cases will more than offset small content losses for smaller engines and stiff competition from new steels for suspension control arms over the period 2012 to 2015. The net increase is expected to be a plus 44.3 pounds per vehicle from 2012 to 2015 compared to an increase of only 10 pounds per vehicle from 2010 to 2012. Component or System Changes for Aluminum Content in 2015 versus 2012 25 20 22.3 Net Gains in Pounds per Vehicle Net Losses in Pounds per Vehicle 15 10 12.6 +48.2 lbs. (3.9) lbs. 5 5.4 0 3 2 1.4 1.5 0-0.5-1 Engines Control Arms & Links -1.2 Other Losses -0.3-1.5-2 -2.5-2.4-3 5
Total North American light vehicle aluminum consumption will increase by 28% in 2015 over 2012. The increase is an equal combination of more vehicles and more aluminum content per vehicle. Consumption in 2015 will surpass any records set in previous decades by one billion pounds. 8000 Aluminum Consumption for Light Vehicles 7000 6886 6000 5395 Millions of Pounds 5000 4000 3000 2000 1000 0 2012 2015 6
In 2015, the total aluminum content for the 17.46 million vehicles of expected production will equal nearly 7 billion pounds. Body and closure parts will be 11% of the total. 33% of the content will be for engine parts. Millions of Net Al Pounds by Component/System Body & Closures Bumpers Suspension Steering 80 143 243 777 Component/System Share of Al Consumption 1% 2% 2% 11% 12% 4% 2% 12% Brakes 173 16% 9% Wheels Heat Transfer 658 1083 10% 19% Transmission & Driveline 1325 All other Blocks Other Engine Heads Blocks 629 812 803 Heads Transmission & Driveline Wheels Steering Other Engine Heat Transfer Brakes Suspension All other 161 Bumpers Body & Closures 0 500 1000 1500 6.9 Billion Pounds 7
Aluminum s share of the 3,798-pound curb weight in 2015 is expected to be 10.4%. This is compared to the 9% share of the 3,828-pound curb weight in 2012. Tesla, Mercedes, BMW and Ford will exceed the average aluminum content and the average aluminum share of curb weight for 2015. 9.0% 8
As aluminum content spreads across vehicle segments, the E Segment, SUV Segment and PUP Segment emerge as content leaders. 2015 Vehicle Segment Average Aluminum Pounds and Share of 2015 Production A/B Segment Fiat 500 Ford Fiesta 251.6 lb. s 3% of Production MPV Segment Honda Odyssey Chrysler Town & Country 396.5 lb. s 4% of Production C Segment Ford Focus Honda Civic 273.9 lb. s 17% of Production SUV Segment Chevy Suburban Jeep Grand Cherokee 410.3 lb. s 33% of Production D Segment Chevy Malibu Dodge Charger MUSTANG 363.3 lb. s 21% of Production VAN Segment Dodge Sprinter Ford Transit 273.2 lb. s 2% of Production E Segment Cadillac XTS STING RAY 546.9 lb. s 2% of Production PUP Segment Ford F150 Ram 1500 548.9 lb. s 17% of Production 9
The 2015 Ford F-150 is a test case for a high-volume aluminum vehicle, achieving ~ 700 lbs. of weight savings over the current model. Redesigned 2015 F-150 600 Pounds (Excludes 70 pounds of extruded aluminum products) The aluminum-bodied F-150 goes into production later this year. This is the first high-volume aluminum-bodied vehicle to go into production in the world. When the program reaches full production in 2016, Ford will be making 850,000 trucks per year and require 350,000 tons of aluminum sheet per annum. 10
The 2015 Ford F-150 will have over 1,000 pounds of net aluminum content, or approximately 25% of its curb weight. 2015 F150 Crew Cab Lbs. / Vehicle CY2015 Blocks 71 Heads 66 Other Engine 37 Transmission Cases 68 Other Transmission 12 Differential Carriers 17 Drive shafts & Yokes 7 Heat Exchangers 32 Heat Shields and Sinks 10 Wheels 72 Brakes 6 Steering 5 Closures 223 Body Sheet HT 281 Body Sheet NHT 96 Body Shapes 31 Body Tube 37 All other 9 Total 1080 26% 2015 F-150 Crew Cab Net Aluminum Content 3% 9% 3% 1% 7% 21% 6% 3% 7% 0% 1,080 Pounds 25% of Curb Weight 6% 3% 1% 1% 1% 2% 1% Blocks Heads Other Engine Transmission Cases Other Transmission Differential Carriers Drive shafts & Yokes Heat Exchangers Heat Shields and Sinks Wheels Brakes Steering Closures Body Sheet HT Body Sheet NHT Body Shapes Body Tube All other 11
Aluminum sheet for light vehicle body and closure parts will grow from less than 200 million pounds in 2012 to nearly 4 billion pounds by 2025. This growth of aluminum rolled products for automotive applications will require a tremendous increase in heat treating capacity. Ford, General Motors and Fiat Chrysler will be the biggest users of aluminum sheet Every leading automaker will have several aluminum body and closure panel programs by 2025. 26.6% of all the body and closure parts on a volume basis will be made of aluminum in 2025. 70% of the aluminum sheet will need to be 6xxx heat treatable sheet. Millions of Pounds 4500 4000 3500 3000 2500 2000 1500 1000 500 NA Aluminum Sheet Demand For Auto Body and Closure Parts 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 12
The number of vehicles with aluminum closures and complete body structures will increase by significant proportions over the next ten years. 90% 80% 85% 73% Aluminum Penetration for Closures and Complete Bodies Share of All Light Vehicles 70% 60% 50% 40% 30% 20% 48% 34% 19% 27% 28% 46% 26% 33% 30% 24% 18% 10% 6% 6% 7% 4% 4% 9% 0% Hoods Fenders Doors Trunk/Gate Roof Complete Bodies 2012 2015 2020 2025 The chart does not include the numerous vehicles that will also have partial body structures, vacuum die cast shock towers and other VD cast body parts. 13
The material mix for body and closure parts will change dramatically over the next ten years. On a weight basis, aluminum will grow to 19% of the weight for body and closure parts by 2025. 8, 1% 2012 37, 4% 3, 0% 1, 0% 2015 154, 15% Mild and HSLA Mild and HSLA AHSS/UHSS Aluminum Sheet 201, 20% AHSS/UHSS Aluminum Sheet 861, 84% Aluminum Extrusions Aluminum VD Castings 751, 76% Aluminum Extrusions Aluminum VD Castings 1023 lbs. 993 lbs. 8, 1% 92, 10% 5, 1% 2020 13, 2% 8, 1% 2025 277, 29% 559, 59% Mild and HSLA AHSS/UHSS Aluminum Sheet Aluminum Extrusions Aluminum VD Castings 144, 16% 357, 40% 366, 41% Mild and HSLA AHSS/UHSS Aluminum Sheet Aluminum Extrusions Aluminum VD Castings 941 lbs. 888 lbs. 14
A mild, HSLA and bake hard steel body structure with closures weighs on average 1,060 pounds. This excludes bumpers and the 500-pound ladder frame for pickup trucks. By 2025, the weight for the average body with closures will be 888 pounds. This is based on a constant vehicle footprint of 49 square feet. New materials, including aluminum, will continue to save weight without sacrificing safety, size or efficiency. 1200 Net Pounds for Body and Closures 1000 800 600 400 200 Aluminum VD Castings Aluminum Extrusions Aluminum Sheet AHSS/UHSS Mild and HSLA 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 15
By 2025, 26.6% of all the body and closure parts for light vehicles in North America will be made of aluminum (measured by volume rather than weight). A burst of aluminum activity is expected in the few years leading up to the 2025 EPA mandate of 161 grams of CO2 per mile taking full effect. Aluminum Volume Share of Body and Closure Components 30% 25% 20% 16.9% 19.0% 20.2% 22.1% 25.6% 26.6% 15% 10% 6.6% 9.3% 10.7% 11.5% 13.7% 5% 0% 1.4% 1.7% 3.2% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 16
Pickup trucks will demonstrate the highest penetration of aluminum parts for bodies and closures at more than 75% by 2025. If the fuel economy achieved with powertrain changes does not achieve projected levels, additional fuel economy improvements can be achieved through additional aluminum based weight savings on C, D and SUV segment vehicles. Other segments such as minivans and E segment cars are also candidates for additional weight savings, but their volumes are too small to have a significant impact on CO2 emissions. Aluminum Volume Share of Body and Closure Components by Vehicle Type 80% 75.9% 70% 60% 59.3% 50% 40% 30% 20% 10% 22.1% 22.0% 11.5% 10.8% 4.0% 4.8% 17.7% 0% Pickup Trucks SUV / CUV Minivan 2015 2020 2025 17
In the car segments, E Segment vehicles will show the highest aluminum penetration for body and closure parts at nearly 24% by 2025. Weight savings estimates remain conservative for C segment and D segment cars given they are the prime candidates for hybrid and electric powertrains. Alternative powertrain assumptions will be severely challenged by the high cost of hybrid, plug-in and all-electric technologies. A low-cost, low weight battery solution is not yet on the horizon. Aluminum Volume Share of Body and Closure Components by C, D & E Segment Cars 30% 25% 23.9% 20% 15% 13.8% 10% 5% 0% 8.7% 7.8% 4.7% 5.2% 3.9% 2.5% 0.7% E Segment D Segment C Segment 2015 2020 2025 18
Extensive use of aluminum, dual phase, complex phase and press hardened steels will be required to remove 150-200 pounds out of the average auto body with closures by 2025. To remove more than 200 pounds it will require aluminum to be used for over 30% of the parts. 1% Light Vehicle Body and Closure Part Volume Share by Material 2012 2015 18% 81% Mild and HSLA AHSS/UHSS Aluminum Sheet Aluminum Extrusions Aluminum VD Castings 23% 6% 71% Mild and HSLA AHSS/UHSS Aluminum Sheet Aluminum Extrusions Aluminum VD Castings 1% 1% 2020 2% 1% 2025 15% Mild and HSLA AHSS/UHSS 23% 33% Mild and HSLA AHSS/UHSS Aluminum Sheet 31% 52% Aluminum Sheet Aluminum Extrusions Aluminum VD Castings 41% Aluminum Extrusions Aluminum VD Castings 19
As aluminum grows to 26% of the part volume for light vehicle bodies and closures, the total amount of material needed in 2025 will decline by over 3 billion pounds per year over the need in 2012. Millions of Pounds Saved 3,500 3,000 2,500 2,000 1,500 1,000 500 Gross Weight Savings for Body & Closure Parts 2012-2025 Cumulative Savings of 175 pounds per vehicle from 239 pounds of Aluminum Additions per vehicle 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Savings due to Aluminum Sheet Savings due to Aluminum VD Castings Savings due to Aluminum Extrusions Private and Confidential 20
Fifty years of uninterrupted aluminum growth for North American manufactured light vehicles is guaranteed. There is nothing on the horizon that would indicate that this burst in aluminum growth can be significantly slowed over the next ten years. 600 Aluminum Net Pounds per North American Light Vehicle 547 500 473 Net Pounds per Vehicle 400 300 200 120 139 165 212 258 306 340 394 100 0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 Calendar Year 21
Aluminum heat treated and non-heat treated sheet, extruded shapes and tube as well as vacuum assisted high pressure die castings are the products that will benefit the most from the need to use more aluminum to save weight and improve fuel economy by 90% by 2025. All other product forms including conventional HPDC, permanent mold castings, brazing sheet, fin stock, rod and bar and forgings will only increase by 27 pounds in total over the period 2012 to 2025. Net Pounds per Vehicle for Select Product Forms 160 150 Net Pounds per Vehicle 140 120 100 80 60 40 20 0 2012 97 2015 2020 2025 42 42 35 24.6 19.1 13.4 12 7 1 Rolled Products Extruded Produts Vacuum Die Castings This chart excludes rod and bar, fin stock, brazing sheet, forgings and all castings except VDC 22
Light vehicles will be the most important global market for aluminum in the coming decade. 30-35 million tons if the world follows NA Millions of Tons 20 18 16 14 12 10 8 6 4 2 0 54 Million Vehicles 4.9 57% 43% Global Light Vehicle Aluminum Use History and Forecast (includes scrap) 8.7 11.4 1999 2012 2015 2020 2025 14.8 120 Million Vehicles 18 Million Ton Base 20 Million Ton Upside 45% 55% Will be closer to 50/50, if sheet prompt scrap is closed loop recycled Primary Secondary 23
This concludes our report. Thank you. This presentation was prepared by Ducker Worldwide LLC. Opinions and estimates constitute judgment as of the date of this material and are subject to change without notice. Any interpretations derived from these findings are the sole responsibility of the client. Reproductionwithoutthe explicitconsentofduckerworldwidellcisstrictly prohibited. For 50 years, Ducker Worldwide has enabled clients to navigate and thrive in a dynamic, global marketplace. Our unique and proven combination of custom market intelligence, critical thinking and strategic consulting create valuable opportunities that deliver critical results. For more information regarding our strategic services, expertise and to learn how Ducker Worldwide can help you,please contact one of our team members at 248-644-0086 or visit our website at www.ducker.com 24