“Clunk”: $89bn of Iron Ore Locked Out of Electric Car Market
From Range Rover to Toyota, auto groups are using new materials that will edge over 100m tonnes of iron ore out of the car market
In a gleaming car factory in an industrial town in England, engineers work alongside robots, putting together four-wheel-drives. Built like a tank and priced at £99,000 ($132,000), the assembly line churns out Range Rovers, one of the most expensive cars on the UK market, many of them bound for China.
Under pristine strip-lighting, there is something odd about the panelling: from its air vents to the back bumper, instead of steel or aluminium, large sections of the car are made of plastic and carbon fibre.
With annual sales of $1.6 trillion, the global car market is going through a technological revolution, shifting from petrol and diesel to all-electric models, propelling battery metals, from lithium to nickel. But in the race to make batteries go further, designers are also stripping out every kilo they can.
Steel is the biggest building block in the car industry: one tonne of iron ore, plus half a tonne of coking coal, makes roughly enough steel for a mid-sized hatchback. In the US and Europe, cars guzzle a quarter of all steel produced, the second biggest user, behind construction.
Auto groups have long toyed with moving to lightweight aluminium, used in beer cans and tinfoil. Ten times the price, Range Rovers and Tesla's Model S both have an aluminium chassis. But steel groups have fought back: ArcelorMittal, which generated over $12bn from the car market last year, ploughs a third of its research budget into developing new high-performance metals and several marques, including Audi, have reverted to high-strength steel.
Now, new wonder materials are flying into the industry. From hemp fibres to eucalyptus, as cars look to the future, designers are becoming experimental in what they are willing to use. A fleet of boxy electric hatchbacks recently bought by the London Fire Brigade look like they are made of metal, but the entire bodywork is
reinforced plastic. Made by BMW, the company has sold 140,000, worth $6.2bn.
British inventor Sir James Dyson, who popularised the bagless vacuum cleaner, has meanwhile converted an old airfield in the south of England into an electric car factory with 10 miles of test-track. All his other products are made using bright, transparent plastic.
Even Toyota is mixing things up, pumping money into plantations that grow kenaf, grass that shoots-up like bamboo, absorbing CO2. Toyota uses the fibre to make plant-based plastics, replacing oil-based components, from door trim to accelerator pedals.
It is an industry-wide effort: Ford uses 23m kgs of recycled plastic on the outside of its cars each year, Honda melts old bumpers to make new mud-guards, whilst Range Rover charges customers an extra £6,230 ($8,173) for their seat covers to be made from old bottle tops. Overall, a car's plastic content has risen 20-fold since the 1960s to 166kg, equal to half its volume, whilst steel accounts for half the weight.
The car industry buys 88m tonnes of steel each year and over 100m tonnes of iron ore, worth $89bn to mining companies over 10 years. That is only a small dent in their earnings. But for steel it is more drastic: sales by US Steel to the car industry have halved since 2013.
Mining analysts flatly reject the idea that steel and iron ore will be stripped out of the supply chain. “Are you thinking your lifetime, or your children's children's lifetime?” says Panmure Gordon analyst Kieron Hodgson. “People like doors to go clunk,” says Investec’s Marc Elliott.
New materials can be expensive to repair, difficult to recycle and often mean ripping-out factories. “The auto industry is a litany of failed efforts.”
Carmakers also downplay the idea of building toy-like plastic cars. When new, more efficient materials are introduced successfully, customers are not meant to
even notice, designers for toy giant Lego, technically the world's biggest carmaker, have told the Financial Times.
Looking at other products, from riot shields to Ducati motorbikes, and the idea of the auto industry moving on from metal is not so fanciful. Velodrome racing bikes have followed the same curve from steel and aluminium to carbon fibre, whilst blades for wind turbines, designed to withstand the impact of a flying swan, have shifted from aluminium to fibre glass and reinforced polymers. Steel blades are now seen as heavy and inefficient.
Boeing's new Dreamliner, the 787, has also shrugged off criticism from aerospace designers for using an all-plastic fuselage.
In Formula One, a test-bed for new technologies, designers are split into two camps. Italian Enzo Ferrari believed an engine was the key element in a car, simply painting the steel body with trademark red paint. “Aerodynamics,” he said, “are for people who can’t build engines.”
But rivals at racing team Lotus designed lighter models with better handling, using fins to pin the car to the track and stripping out the chassis, replacing it with an aluminium shell that later flipped to carbon fibre. Every team, including Ferrari, now uses its technology.
Back at Range Rover’s factory, engineers have cut half a tonne off the weight of some models by introducing new materials. “Adding power makes you faster on the straights,” Lotus designer Colin Chapman said. “Subtracting weight makes you faster everywhere.”
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