It’s time to reassess materials for automotive lightweighting

With tough new fuel economy and emissions standards on the way and high penalties for missing them, OEMs will need to increase their use of lightweight materials. By Nicolai Müller and Tim Ellringmann of McKinsey & Company

Automotive OEMs continue to struggle to meet both government-mandated efficiency goals and customer demands for improved fuel economy. In the US, for example, OEM corporate average fuel economy (CAFE) requirements rise to 55.8 miles per gallon (mpg) in 2025 – a level no OEM currently meets – from 37.8 mpg in 2016 (Exhibit 1). Similar tough increases are expected in the European Union (EU) with strict carbon dioxide (CO2) limits, which have a direct correlation with fuel economy. Latest discussions on real emissions in drive cycles, NOx regulation and incentives for specific powertrain technologies look set to enforce the need for action.

Exhibit 1: Fuel economy targets

McKinsey lightweighting chart - fuel economy targets

Various recent surveys have revealed that consumers expect to see significant improvements in fuel efficiency going forward. Many strongly support fuel economy standards, and expect their next car to achieve much better fuel economy than their current one does.

Lightweighting will play a critical role

Vehicle manufacturers have a number of options when it comes to improving fuel efficiency and they will need to pursue most of them to meet the new tough standards (see Exhibit 2).

Exhibit 2: Abatement curve

McKinsey lightweighting chart - lightweighting alternatives

For example, they can focus on boosting the fuel economy of current internal combustion engines (ICEs) by introducing new designs or by pairing them with transmissions that are more efficient. Yet it remains to be seen how the regulatory regime for gasoline emissions will develop globally and for diesel in Europe in particular. Another option for OEMs is to introduce new types of electric powertrains, as hybrid electric vehicles (HEVs) or battery electric vehicles (BEVs). The OEMs can also work to improve vehicle aerodynamics in order to boost fuel efficiency. And they can also take steps to shed pounds from their vehicles by introducing lighter-weight materials or by reducing the number, size, and weight of components via new designs.

Companies that pursue lightweighting often uncover strong synergies that they can harness. For instance, a lower overall vehicle weight would allow them to use smaller, more fuel-efficient engines. And changing the materials used in some components can make it possible to reduce the sizes of other parts as well. In electric vehicles, lightweight materials could offset some of the extra weight that the battery adds. These realities will make lightweighting an important part of every OEM’s future fleet fuel efficiency strategy. Designing weight out of a car has a direct, non-linear impact on the vehicle’s fuel economy that ranges from 0.3 to 0.4 l/100km per 100kg (220lbs) of weight reduction.

More precisely, there are four reasons that create a willingness-to-pay for vehicle manufacturers to design lighter cars:

  • Avoidance of penalties: lighter cars help in reaching fuel economy targets;
  • BEV range optimisation: given that OEMs are developing full electric cars with a fixed desired range in mind, lightweight materials help optimise the interplay between battery size, weight, and range;
  • Inertia class steps: the willingness-to-pay for additional lightweight measures during the development process also depends on how much it would take to surpass the boundary to the next lower inertia class defined for the test cycle;
  • Special vehicle segments: customers buy sports and luxury vehicles for their driving experience. Besides factors such as engine power, lightweight has a direct influence on, for example, handling and thus, defines the driving experience of these cars.

The prices that OEMs are willing to pay for lighter weight will probably increase in the future, as regulations become tighter, other material options are exhausted, and the number of electric vehicles on sale proliferates. Regarding the latter, the need to compensate for heavy battery packs will drive this spending. A variety of sources suggests that these forces will put continued upward pressure on OEM willingness to pay more for lightweighting. Where in the past vehicle manufacturers would willingly pay US$1-2 per kg of weight cut, currently they pay US$4-12, depending on segment. In the future, analysts project that they could pay up to US$20 per kg. This upper limit likely applies primarily to luxury and performance cars. Acceptable costs for mid-level premium models will probably range from US$5-14 per kg, and for lower segment cars about US$3 per kg. Besides segment, this willingness to pay also varies by position of the weight saved in the car and on other factors not always related to pure economic factors. Rotating masses like wheels or driveshaft and high masses like the roof are prioritised.

Exhibit 3: Willingness to pay

McKinsey lightweighting chart - OEM willingness to pay

Given this willingness to pay for lightweighting, OEMs are exploring many opportunities in this area, most of which focus on substituting lighter materials such as high-strength steel (HSS), aluminium, magnesium, glass reinforced composites, and carbon fibre. Of these, HSS is among the most cost-effective and thus the most common today. For car body and closure applications, it costs up to US$2.25 per kg reduced. Aluminium ranges from US$3-6 per kg cut, magnesium from US$5-12, and carbon fibre starts at about US$16. In addition to cost, each material has unique processing characteristics. For instance, HSS exhibits a low cost in relation to regular steel and is relatively easy to form, while carbon fibre is both very costly and difficult to turn into vehicle structural components resulting in long process qualification and significant scrap rates (Exhibit 3).

As part of an overall material mix, carbon fibre represents a mid- to long-term opportunity, most likely in an aggressive lightweight scenario. This could be an interesting option, especially regarding sports cars and luxury cars as well as for some BEVs. Integrating carbon fibre into the vehicle material mix creates major challenges in design, simulation, and parts processing, combining technologies rather than more conventional metals. Besides the impact on costs, the impact on the overall value chain makes most OEMs still hesitant to introduce fibre-reinforced composites into their lightweight strategy.

Exhibit 4: Material trade off analysis

McKinsey lightweighting chart - weight v cost

Companies are already exploring many of these weight-reduction opportunities in the market. In 2012, the new Range Rover was introduced with a weight of 400kg below that of its predecessor. This was possible by making extensive use of aluminium. This material strategy was also pursued by Ford for re-designing its best-selling F-150 in 2015, which reduced its total weight by more than 300kg. And some vehicle manufacturers are using materials that are even more advanced. The 2015 BMW 7 Series has been slimmed down by 130kg compared to the old model’s weight by using an advanced material mix, including carbon fibre.

Taking a targeted lightweight materials approach

Most OEMs have yet to implement their lightweight opportunities fully. One issue many face involves timing. Vehicle manufacturers typically only introduce substantial amounts of new lightweight materials at a new vehicle launch or during a major redesign of current platforms, which might only happen every five to seven years. Consequently, companies should develop a clear lightweight strategy roadmap for the introduction of additional lightweight materials, starting in high performance, luxury and electric vehicles. It seems likely that aluminium body panels and closures will evolve into an industry-wide key lightweighting initiative, but that uptake will vary by segment. In North America, for example, researchers predict that aluminium use will increase from 343kg per vehicle in 2012 to 550kg in 2025 (Exhibit 4). Any lightweight roadmap has to be tailored to the specific requirements and legacy (e.g. equipment footprint and process know-how) an OEM brings.

Exhibit 5: Aluminium use by segment

McKinsey lightweighting chart - aluminium use by segment

They expect virtually all of this growth to involve vehicle body and closure systems. On a segment basis, pickup trucks, SUVs and premium cars are likely to see the largest applications, due to the drastic weight reductions required by these vehicles. For instance, analysts predict that the share of aluminium in pickup truck body and closure applications will grow from 22% in 2015 to over 75% in 2025.

It is important to note the differences that exist in aluminium penetration rates in the US and the EU. US pickup trucks feature far more of the materials than similar vehicles sold in Europe, at roughly 400lbs versus 130lbs (138kg and 59kg), respectively. A large part of this difference is that EU pickup trucks are overwhelmingly commercial vehicles, while Americans often buy them as personal vehicles.

Consequently, they make up a far larger part of an OEM’s fleet in the US and thus have a larger impact on fuel economy ratings. At the same time, European vehicle manufacturers use about 100 pounds more aluminium in their premium cars than do Americans. Most of the high-end European brands have already moved heavily into aluminium, a fact reflected in the superior fuel economy of some marques compared to their American counterparts.

In the face of increasingly tough efficiency and emissions standards, and the massive penalties for missing them, vehicle manufacturers need to develop a coherent strategy when it comes to using lightweight materials in their light vehicles. By taking a targeted, fact-based approach to lightweighting, OEMs can confidently balance regulatory mandates and consumer demands on one side against the need to make sustainable profits on the other.

This article is part of an exclusive Automotive World report on lightweighting. Follow this link to download a copy of Special report: Vehicle lightweighting