While there are still some challenges, China is confident in aluminium use
By 2030, China is poised to consume approximately 10 million tonnes of aluminium for manufacturing New Energy Vehicles (NEVs), a stark rise from the estimated 2 million tonnes in 2023. This surge reflects the rapid expansion of China’s NEV sector, driven by ambitious targets to peak carbon emissions by 2030 and achieve carbon neutrality by 2060.
In May 2024 alone, China produced 940,000 NEVs, marking a 31.9 percent increase from the previous year. Concurrently, sales of NEVs reached 955,000 units, up by 33.3 percent, capturing a 39.5 percent share of the country’s total automobile market that month. Moreover, anticipating continued growth, market participants forecast NEVs to command a 50 percent market share by 2025 and 70 percent by 2030.
Moreover, NEVs, characterised by their heavier weight compared to internal combustion engine vehicles, necessitate substantial lightweighting efforts to optimise driving range. aluminium, crucial for its lightweight properties, finds extensive use in NEV components such as bodies, chassis, motors, power batteries, and electronic control systems.
Forecasts from the Society of Automotive Engineers suggest that by 2030, each NEV will incorporate over 350kg of aluminium, up from 190kg in 2020. Despite these promising projections, challenges persist. aluminium remains significantly more expensive than steel, prompting ongoing debate within the industry on cost-effectiveness versus performance benefits.
On top of that, high-end NEVs, priced above 200,000 yuan ($27,500), tend to favour aluminium, whereas lower-priced models often opt for steel to manage costs. Balancing material choice with production expenses is critical as manufacturers strive to meet diverse market demands.
The aluminium sector faces technical hurdles. aluminium’s formability for complex automotive parts lags behind that of steel, complicating its broader adoption. Significant investment in research and development is essential to overcome these obstacles and enhance the viability of aluminium in NEV manufacturing.
What’s more, beyond automotive applications, the growth in NEVs is expected to drive increased demand for aluminium in China’s broader energy landscape, including solar energy and energy storage sectors. This anticipated rise underscores the country’s evolving industrial dynamics and the imperative for strategic resource management.
While recent trends show a decline in China’s aluminium imports due to market dynamics, long-term projections suggest a potential need for increased imports to meet burgeoning demand, despite domestic production capacity constraints.
We got all this from Fastmarkets and their full article is linked here. Thank you Fastmarkets for the information.
