Aluminium industry set to witness demand surge with the growth of domestic EV sector, says top executives of Indian Aluminium Industry

The aluminium industry is set to witness a demand surge with the growth prospects supplied by the domestic-grown electric vehicle sector, as this has been widespread news around the EV, which has shifted the spotlight on the conventional aluminium industry.

Aluminium as a metal is not just the cheapest but also one of the lightest is much endeavoured after by the EV and the aerospace industry as it helps minimise the overall weight of the structure while maintaining the strength. Elon Musk’s Tesla car models, for example, uses nearly 200 kg of aluminium to restrict their overall weight to around 2,000 kg.

In reality, the automobile industry has been one of the largest consumers of aluminium. The silvery-white metal is not just used for manufacturing the frame and body of vehicles, but also electrical wiring, wheels, ABS brakes, transmission, air conditioner condenser and pipes, and in engine parts like pistons, radiator and cylinder head.

However, the usage of aluminium outperforming steel, upgrades performance, safety, fuel efficiency and durability, and also renders many environmental benefits.

Ajay Kapur, CEO, Aluminium & Power & MD – Commercial, Vedanta, said: “EVs are currently range constrained. A 100 kg reduction in the weight of an EV can translate into an additional 10-15% increase in range. And the increased range is critical to drive higher EV adoption and close the gap with ICE vehicles."

Industry experts commented that at the earliest, aluminium will be used for building the EV infrastructure alongside its expanded usage in the electric vehicle itself.

Naveen Mehta, President (Operations) at Jindal Aluminium, said; “With charging stations and battery casings put together, aluminium extrusion usage can increase up to 80 kg per vehicle on average."

Mehta adds: “As the automobile manufacturers bring out design evolution in multi-material EVs, they will continue to increase the use of aluminium. The downstream aluminium manufacturing industry is ready for this and working hard to offer the best alloys and solutions to meet the EV manufacturing requirements for both the vehicles and associated charging infrastructure.”

On average around 240 - 250 kg of aluminium is believed to be used in each EV worldwide. In 2018, the demand for aluminium from the EV producers was about 250 KT (kilometric tonnes) globally and by 2030, it is expected to exceed 10 MTPA.

“The EV penetration in India is expected to be around 10-20% in 2030, and it will be driven by four factors — regulations, incentives and investments by the government, cost competitiveness of EVs, investment by OEMs, and charging infrastructure, added Ajay Kapur.

Kapur further added: “In the non-EV segment, the average aluminium consumption is about 50-70 kg in a car and 20-30 kg in a bike. Domestic aluminium producers supply around 50 KTPA out of a total of 110 KTPA of primary consumption. As of now, there is no change in the design of a car between EV and ICE, so average demand is almost the same across both segments.”

Lately, Indian Oil Corporation tied up in a joint venture with Israel-based battery technology start-up Phinergy to develop aluminium-air battery systems for EVs and stationary storage, as well as hydrogen storage solutions.

Dharmendra Pradhan, Minister for Petroleum and Natural Gas, Govt. of India, said: “The JV plans to manufacture aluminium air systems in India and provide a boost to India’s ‘Make in India’ programme. At the same time, recycling of aluminium will help India in becoming ‘Self-reliant’ for energy requirements.”

The challenges of aluminium margin reduction, lack of incentives for value addition, and a contracting market share as aluminium imports receive subsidies are among the significant issues the downstream aluminium producers are countering presently. 

Mehta further added: “With a 13% export incentive available to them, the Chinese are dumping downstream products in India. With government support and sops, we can support the EV industry better and contribute to its faster and successful growth."