Novelis CEO Sees Electric Cars Energizing Aluminum Makers

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Aluminum makers, already benefiting from increased use of aluminum by auto makers, stand to gain further from growth in the electric car industry, Phil Martens, Chief Executive of Novelis Inc., and a former Ford Motor Co. executive, said.

Novelis, a unit of Hindalco Industries Ltd. , has invested over $550 million since 2011 to increase auto sheet production capacity in upstate New York, Germany, and China, to produce more aluminum for cars. The company is now looking at further expanding production in the U.S. "I wish we had 100,000 tons more capacity," Martens said. "We’re clearly looking at what to do next."

Electric cars are still a fledgling industry—and one that already uses aluminum. Tesla Motors Inc. makes its Model S sedan and forthcoming Model X sport utility out of aluminum, and has forecast substantial growth globally for its vehicles.

"You’re going to have a whole new infrastructure with lightweight structures," said Martens, mentioning plans by Google Inc. to build a self-driving cars and unconfirmed media reports that Apple Inc. is working on an electric car. "And we expect it will be very aluminum-intensive."

Several other longer-range electric cars set to debut over the next several years could take advantage of aluminum’s lightweight characteristics. Already, mainstream car makers, led by Ford with the F-150, are ramping up their use of aluminum as they try to meet new government fuel efficiency standards by making cars lighter; eighteen percent of all vehicles in the U.S. will have all-aluminum bodies by 2025, compared with less than one percent now.

Aluminum is still more expensive than steel, limiting its use so far in developing world markets. Weight and fuel savings make up for the few hundred additional dollars it costs to make a car out of aluminum, Martens said. "That’s why this is a global company with a global manufacturing strategy," he said. "Our China facility will be sold out." 

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