China’s aluminium usage for NEVs likely to reach a double-digit figure by 2030

Increasing investments and developments in China’s new energy vehicle sector are expected to boost aluminium consumption to nearly 10 million tonnes by 2030, compared to 2 million tonnes in 2023. This prediction follows the reported rise in China’s domestic production of new energy vehicles to 940,000 units in May 2024, up 31.9 percent from 712,660 units produced a year ago.

In line with increased production, sales also grew in May this year by 33 percent to 955,000 units versus 716,430 units. Thus, the market share of NEVs in China escalated to 39.5 percent in May, out of total automobile sales amounting to 2.42 million units, according to the China Association of Automobile Manufacturers (CAAM).

With the bullish forecast for China’s NEV production and sales, the domestic NEV share is estimated to account for 50 percent of China’s automobile market by 2025 and 70 percent by 2030. This phenomenon, considering NEVs’ requirement for lightweight, could potentially lead to significant demand growth for aluminium.

Aluminium plays a pivotal role in new energy vehicles, being utilised in the vehicle body and chassis, as well as in the three electric systems – motor, power battery, and electronic control systems.

According to the Energy Saving and NEV Technology Roadmap issued by China’s Society of Automotive Engineers (SAE), aluminium applications in NEVs will reach above 350 kg by 2030, compared to 190 kg in 2020.

In 2022, China used an estimated 10.5 million tonnes of aluminium for its entire transportation industry. According to AL Circle’s report titled “Future of Aluminium in Transportation Sector: An industry analysis with forecasts to 2027,” China’s aluminium usage in the transportation sector will be driven by the increase in electric vehicle production and the increase in per-vehicle aluminium usage. By 2027, China’s aluminium usage in the transportation sector is expected to reach 13.2 million tonnes.

With the rise in demand for NEVs, solar energy, and energy storage sectors, China’s aluminium consumption is expected to keep increasing. Thus, the country will need to import a large amount of the metal in the long term, given the domestic capacity cap of 45.5 million tonnes per year.

However, due to budget constraints, mid-to-high end NEVs, with sales prices of more than RMB 200,000 or $27,500, use more aluminium, while low-end NEVs tend to use more of steel.