CRU forecasts global battery electric (BEV), plug-in hybrid electric (PHEV) and hybrid electric (HEV) sales will increase to 42 million vehicles worldwide by 2030. From a share of 4% in 2017, CRU expects electric vehicles to account for approximately 30% of the global vehicle fleet by 2030.

Sales of New Energy Vehicles (NEVs) grew by more than 40% year on year globally in 2016. These global trends will have potentially decisive impacts on aluminum markets, CRU maintains.

CRU has developed a comprehensive forecasting and scenario evaluation tool with which to understand these impacts and the policy, technological, macroeconomic and societal factors which shape them. The model incorporates a consistent macroeconomic framework, and considers developments in technology and power markets.

CRU estimated aluminum intensity of EVs through discussions with car makers, Tier 1 and Tier 2 automotive suppliers and information from automotive shows and conferences. The analysts complemented this research with desk-based research of investor material and conference presentation from key industry players.

Plug-in hybrid and full battery electric vehicles use 25-27% more aluminum than the typical internal combustion engine car today, according to CRU. This assumes 160 kg (353 lbs) of aluminum per vehicle as a baseline for aluminum content in internal combustion engines.

Increased aluminum usage in internal combustion engine (ICE) cars is in great part due to the light-weighting benefits of aluminum. However, CRU says, for EVs the increase in aluminum usage has as much to do with new applications, as increased adoption of aluminum body sheet.

CRU has developed a EV aluminum intensity model broken down into four categories:

• E-drive: encompassing housing for e-motors, DC-AC inverters, DC-DC converters, chargers, heat-pumps and reduction drives.

• Batteries and battery housing: covering battery casing for prismatic batteries, battery foil and battery housing. Battery housing is the biggest volume element of this market. Car makers are yet to decide the standard for battery housing, and CRU incorporates a combination of predominantly steel housing (Mitsubishi Outlander PHEV and Nissan Leaf BEV), cast aluminum battery housing (Audi PHEVs) and a combination of extrusions and rolled products (Tesla Model S).

• BIW and closures: CRU splits this category which covers aluminum automotive body sheet. Current EV models are more aluminum-intensive than current ICE. However, two developments are threatening aluminum body sheet uptake from EVs. First, improved battery technology reduces the need to lightweight. Second, carmakers are now designing EVs from scratch, rather than converting ICE models, which increases the driving range. Cars such as the Nissan Leaf and Tesla Model 3 are less aluminum-intensive than previous models. Nonetheless an undershoot in battery advances will be a boon to aluminum sheet to light weight and extend range.

• Common with ICE: CRU estimates there is just more than 60 kg (132 lbs) curb weight from ICEs which will be present in all EVs—brakes, steering, heat exchangers and wheels. In addition, plug-in and hybrid electric vehicles retain the engine supporting secondary castings demand.

EV battery housing gives the largest potential upside to aluminum extrusions usage. More modest gains for extrusions will come in existing applications, such as trim and crash management systems.

However, companies such as Magna and Nemak are hoping to dominate battery housing with cast aluminum solutions. These companies are key aluminum engine part suppliers today and need to adapt to the shifting automotive landscape.

Excluding used beverage cans, car engines are the main market for end-of-life aluminum scrap. CRU forecasts that by retaining the engine, plug-in and hybrid vehicles will support secondary aluminum castings demand—postponing the onset of a “castings Armageddon” in the form of a universal shift to battery electric vehicles and the concomitant disappearance of engines.

CRU also suggests that aluminum rollers should be betting against great leaps in battery technology and extended driving range. For the previously mentioned castings and extrusions applications, aluminum is the most suitable material. For rolled products, it is mostly the light weight benefit.

Primary aluminum producers and indeed the LME price have great potential upside from EVs, CRU maintains. No primary producers today are exposed to the secondary castings market. A wholesale shift to battery electric vehicles will boost primary aluminum demand at the expense of aluminum scrap.

CRU released an aluminum Long Term Market Outlook, presenting production and capacity data by smelter and a primary aluminum market balance by region, in late December 2017.