Aluminum supplier responds to growing demand

The push for electrification is driving demand for aluminum across the auto sector. And that is driving new investment for aluminum supplier Novelis Inc.

Novelis, owned by India's Aditya Birla Group, supplies aluminum to more than 30 automakers, ranging from Ford Motor Co. to Jaguar Land Rover and Nio.

But to help it gain market share, Novelis will invest more than $10 million in three Customer Solutions Centers, Novelis Vice President Pierre Labat told Automotive News.

The hubs, part research and part operations centers, will work with automakers to incorporate aluminum into vehicles via applications such as car doors, electric battery enclosures and body-in-white.

The customer centers are a new way to engage with automakers and bring research and technical platforms, operations and commercial development together.

"We cannot assume that our customers know everything about aluminum," Labat said. "We need to become an extension of the customer's team."

The centers will be staffed with automotive designers, materials and manufacturing experts, industrial engineers and financial analysts who will help identify the most efficient and cost-effective alloy mix for various components and develop ways to assemble them.

Novelis will open a center in Novi, Mich., next year. The supplier chose to put the U.S. customer service center in the Detroit area to be near auto customers, industry talent and research universities.

The centers will collaborate with Novelis' global r&d center in Kennesaw, Ga.

The supplier's automotive division has seen a 25 percent compounded annual growth rate for the past five years. Over the past two years, Novelis has been expanding employment and production at its automotive aluminum line in Oswego, N.Y., where it expects to have 1,350 workers by 2020.

Aluminum content is expected to grow from an average of 397 pounds per vehicle in 2015 to 565 by 2028, according to a survey of automakers by Ducker Worldwide.

While Novelis has historically supplied aluminum for use in vehicle bodies, the electric battery — the single most expensive component of an EV — presents a new market opportunity.

"The battery provides us a new application that just did not exist under the hood of an internal combustion engine" car, Labat said. "We not only have an opportunity to sell more in the normal body-in-white, but also in the battery enclosure."

Using aluminum to enclose a lithium ion battery pack in an EV can reduce the weight by up to 40 percent and improve battery energy consumption by up to 10 percent, he said.

By 2030, electrified vehicles, including plug-ins, could account for 25 to 30 percent of Atlanta-based Novelis' automotive business.