Key facts
- Companies are increasingly substituting copper with aluminum due to copper's record high prices.
- Aluminum is about a quarter of the price of copper but has lower conductivity.
- The copper-to-aluminum price ratio is a key factor in the decision to switch.
- Automakers like Ferrari, BMW, and Tesla are using aluminum wiring to save weight and cost.
- Electrical cable manufacturers and HVAC companies are also adopting aluminum.
- Aluminum's lighter weight is particularly beneficial for electric vehicles and power lines.
The significant increase in copper prices has prompted various industries to consider and implement the substitution of copper with aluminum, a cheaper and lighter alternative. This shift is driven by the economic advantage and weight reduction benefits aluminum offers, particularly in sectors like automotive and electrical infrastructure.
Aluminum is approximately one-quarter the price of copper, though its electrical conductivity is only about 61% of copper's. This necessitates larger aluminum conductors, but the overall cost savings and weight reduction often outweigh this drawback. Industry sources indicate that companies typically consider the switch when the copper-to-aluminum price ratio reaches between 3.5 to 4.0 or higher, a level that has been met recently.
In the automotive sector, particularly for electric vehicles (EVs), reducing weight is crucial for extending driving range. Ferrari has reported saving 15-20% of total wiring weight by using aluminum wiring, while BMW has progressively increased its use of aluminum conductors since 2011. Tesla has been a pioneer, using aluminum for wiring in models like the Y and Cybertruck, and Chinese EV makers such as AVATR, XPeng, and Xiaomi are also adopting this practice. Toyota is evaluating the material for specific applications, and Volkswagen uses it where benefits are clear.
The electrical wire and cable industry is also seeing this trend. With an estimated €10 trillion in global investment expected for electrical grids by 2030, aluminum is poised to capture a larger share due to its cost advantage, according to Nexans. Prysmian, the world's largest cable maker, currently uses about 40% aluminum by weight. Energy Queensland has been replacing copper with aluminum for years in its distribution network, citing cost-effectiveness, durability, and lighter weight for power lines.
In the heating and air conditioning sector, Daikin Industries is maximizing cost reductions by switching to aluminum. Lennox International and Carrier Global have developed and implemented aluminum coil technology to reduce weight and improve corrosion resistance, especially in coastal environments.