ALUMINIUM 2021 The World's Leading Trade Fair for
Aluminium and its Application Industries
18 – 20 May 2021
Exhibition Center Düsseldorf


Green car boom drives aluminium demand

31 July 2020

The Coronavirus pandemic has brought oil prices sharply down, no one would have predicted that oil prices would even dip briefly into negativ territory. Due to the lockdown in wide parts of the world, car sales fell in the first six month of this year in China and the US by a quarter, in Europe car sales even dropped 38 per cent. But whilst nobody knows, how long the deadly pandemic drags on, especially in the US and some countries in South America like Brazil, it looks like the worst may be over in other parts of the world. With lockdowns slowly lifted, people start to move around again. And since they have to wear face masks in public transport on busses, trains and in airplanes they very much prefer their own cars.

Herbert Diess, group CEO of German’s car giant VW, just this July has predicted: “in five to ten years, the most valuable company in the world will be a mobility company”. According to Diess it “could be Tesla, Apple or Volkswagen”. Meanwhile, Tesla has emerged as the world’s most valuable car company. A more than 250 per cent spike in its share price so far this year saw the electric vehicle (EV) pioneer Tesla surpass US-Dollar (US$) 300 billion in market value in the first half of July 2020. Toyota with a 200 billion US$ market capitalisation is trailing some way back as is VW group with around 140 billion Euro market ca. General Motors with 37 billion US$ isn’t even in Tesla’s rearview mirror. However, even more important than today’s market value (although it helps to finance future development) is to get the whole value chain in order. From responsible sourcing to high production standards and then in the end delivering in time.

After the fallout of the diesel emission scandal VW has committed to electrifying all its 12 brands and has pledged to spend at least 33 billion Euro on producing 75 battery-powered models over the next decade.The battery powered versions of VW’s combustion- engine models, including the eGolf are selling very well and helped the German car builder to avoid fines from the EU. Brussels has imposed strict fleet-wide emissions targets for carmakers selling in Europe. Despite some production delays, Volkswagen’s first purpose-built electric car, the so called ID.3, seems to get on track now and deliveries are due to begin in September. 37 000 people have paid to reserve an ID.3, most of them new customers for the car giant. Established VW brands like the popular Golf hatchback are mostly bought by repeat customers. Jürgen Stackmann, head of these EV sales, believes VW could deliver between 60 000 and 70 000 new EV’s this year and produce about 100 000 units of the ID.3 and its sport-utility successor, the upcoming ID.4 altogether. Tesla sold more than 90 000 EV’s last quarter - not even to mention the big Chinese car companies, including the Swedish Volvo Car group, which belongs to the Chinese Geely Holding. Besides Geely Auto and Volvo the Holding owns quite a range of more or less famous automotive brands, including Lotus, Proton and LEVC, the British black-taxi-manufacturer.

Volvo CEO Hakan Samuelsson expects sales and profits throughout the second half of the to return to pre-pandemic levels. With 20 per cent less cars sold in the first half of the year, Volvo’s did not suffer quite as much concerning sales at others carmakers did. Maybe, the recovery in mainland China helped, but additionally the growing share of EV’s in Volvo model range helped. Whilst other carmakers say they have “just been transferred to the common ward from the intensive care unit”, Samuelsson claims: “We do not need a miraculous recovery, just that the trends we have seen will continue”. If there is no second or third wave of the pandemic, which he doesn’t see coming, Samuelsson thinks “we could really see the business effects of the pandemic confined to the first six months”. In July, Volvo has “seen China recover and sales in all markets rise to slightly above the previous year’s figures”. The short as well as the long term outlook for EV’s remains bright, and China continues to pave the way as the world’s leader in electric vehicle sales. That in the aftermath of the Coronavirus pandemic a lot of countries will pay subsidies to help the transition of traffic and transport to less emissions, is backing up their industries. Germany, for example, recently doubled its subsidy for electric vehicles as part of a 130 billion Euro-package designed to restart the economy after the pandemic brought it to a halt. In total, now car buyers in Germany can get up to 9 000 Euro off the price of a new electric vehicle, any battery-powered car. Any upturn in car sales will increase the demand for aluminium. The light weight metal helps to save energy and, once in use, can be recycelt again and again. Thus, aluminium scrap is never a problem, but always part of the solution.

Author: Katharina Otzen-Odrich / London

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