EV​ bodies: 'Part of the power source'

WHITE, Ga. — When Jean-Mark Germain mulls over his map of North American business opportunities, the CEO of the Dutch aluminum producer Constellium NV knows three things for sure:

1. An unprecedented new market is dawning for aluminum content — especially in electric vehicles.

2. Capturing that business will require bold new investments in aluminum capacity, stepped-up r&d and new factories to make the parts.

3. Doing this for future vehicles is a whole new ballgame.

It's not just a question of whether a piece of Constellium-made aluminum will go into the 2020 model this or that, Germain said while opening Constellium's newest plant here in May. Instead, his company and other aluminum suppliers will be creating vehicle systems, engineered to solve new problems and manufactured with new properties.

"There is a high expectation of change coming to the North American auto industry, in how cars are designed and manufactured," Germain told Automotive News as he toured the factory. "The trend toward lighter and safer vehicles is really putting a lot of wind in our sail. But it is more than that.

"It is the EV market," he said. "For vehicles to carry electric batteries, they will be designed with aluminum structures to hold them. And those structures must do more than traditional metal body structures. They must provide thermal transfer capabilities to keep the battery cool or keep it warm in cold weather. So the structure actually becomes part of the power source."

Constellium's new Georgia plant will supply engineered aluminum body structures to several automakers in the Southeast. A major customer will be BMW Manufacturing 200 miles away in Spartanburg, S.C., where Constellium will support the BMW X5 assembly.

The Georgia plant is part of a rapidly forming network in North America for Constellium, which had 2016 sales of about $5.4 billion. The company once operated under the name Alcan, but is now independent and traded on the New York Stock Exchange.

Since its 2013 public offering, the Amsterdam company has mobilized to position itself for more North American business. It spent $1.4 billion to acquire an aluminum mill in Muscle Shoals, Ala., which had been in the soft drink can business. The machinery for beverage cans can be adapted to also produce auto sheet metal, which the company did. It earmarked another $750 million to expand and improve the mill.

As part of a separate expenditure of $1.2 billion, Constellium opened and expanded other plants in Kentucky, Michigan, Mexico and Canada. The Muscle Shoals mill feeds Constellium's new plant in Bowling Green, Ky., that makes vehicle body sheets.

It also expanded its operations in Van Buren, Mich., to produce extruded aluminum structures for EVs and hybrids in the coming years. They are a leap beyond the world of simple stamped brackets, braces and cradles.

Constellium's body structures work like this:

• The structure consists of extruded aluminum members that have a hollow cavity. Constellium fills the cavity with a phase change material, a substance that will absorb and release thermal energy in the course of freezing or melting. It is a waxlike material that acts as a passive cooling system for a battery.
• The properties of the phase change material — which can be engineered to the customer's vehicle specs — enable the material to hold heat or to "melt" like a wax to carry heat away from the battery. By shielding the battery from temperature extremes, the body structure helps extend the battery's life.

The modules will be primarily produced in the Michigan plant and in San Luis Potosi, Mexico, as well as in Germany for European-market customers and in China.

Germain clarifies that the structures coming out of the new Georgia plant are not designed for EVs initially. It will produce lightweight engineered body structures, but he stops short of saying whether customer EVs are in the plan for Georgia yet. However, he acknowledges that the White factory was designed with a plan to double its size as future customer vehicles come online.

Constellium says its EV body structures will be in use and on the road in Europe within 16 months, and on U.S. roads in 2019, although the company declined to reveal the customer.

Use of aluminum in automotive has steadily increased, despite the industry's century-old reliance on steel. A forecast published last year by Ducker Worldwide of suburban Detroit estimated that by 2025, the average vehicle will use 500 pounds of aluminum, up from 423 pounds in 2014. Vehicle bodies are a key part of the growth curve.

But that envisioned increase represents only an industrywide average, according to Ducker. Aluminum suppliers and others believe that certain model segments — EVs and small cars, in particular — will dial up their aluminum content beyond that average, compared with legacy vehicles and older nameplates. Future-generation models are just now in the design phase, with engineers envisioning them with a clean sheet of paper for the new era of electrification. Those will be more likely to contain aluminum, according to forecasters — especially if battery powertrains are part of the design.

"The weight of the battery is making this more critical," says Lionel Chapis, managing director for automotive structures at Constellium. "The structure for it has to be the lightest solution. Aluminum will not really be an alternative for an EV. It will be mandatory."

The battle over future materials has raged for decades. The steel industry has met the rise of alternative materials by spinning out innovations for lighter-weight, high-strength steels.

The competing material suppliers have pressed their points with a variety of pitches. Most recently, a marketing campaign by the North American steel industry has told automotive customers and the public that steel remains a superior vehicle material because of steel's smaller mill-to-scrap yard environmental impact, according to the Steel Market Development Institute. The trade group contends that steel manufacturing results in lower greenhouse gas emissions than aluminum production.

Germain believes Constellium's thermal property approach will give aluminum an unassailable competitive advantage. But he knows the company faces tough competition as it tries to build its North American footprint.

Other body material contenders are also expanding their U.S. production footprints. In April, Braidy Industries announced it would spend $1.3 billion in eastern Kentucky coal country to build a 2.5 million-square-foot aluminum mill that will begin turning out aluminum body panels in 2020. The company expects to initially produce about 370,000 tons of aluminum a year.

But steel producers are also investing for vehicles to come. Nucor Corp. said this summer it will invest $175 million in a steel galvanizing operation in Ghent, Ky., for automotive customers. It also said it will spend $85 million to modernize its rolling mill in Marion, Ohio, and announced last year a 50-50 joint venture with Japan's a joint JFE Steel Corp. to build a $270 million automotive steel sheet mill in Mexico.

"We are not discounting steel," Germain says. "They are formidable competitors. But we believe they're fighting an uphill battle, which is that our customers are looking for lightweight solutions and the density of aluminum is less than that of steel."

But the car itself is changing, he says. Electrified vehicles require solutions to new problems.

"There's a huge opportunity for us there," he says, "because it's still an embryonic market, and we are here as it takes shape."