Market and Strategic Intelligence for the Advanced Composites Industry

CFRP Automotive Market Revving Up…But Still in Second Gear

BMW has stirred up a hornet’s nest of anticipation within the carbon composites community. To be sure, I believe that the i3 will be a smashing success for carbon composites…and marketing coup for BMW. BMW is already planning on an i8 supercar, and has released a number of other “i” concept cars for the public’s consumption. On top of the BMW activity, there is no shortage of examples of niche supercars that claim carbon fiber in their latest designs.

In true fashion, I had to ponder whether this excitement is justified. After all, BMW has a financial stake its is carbon fiber supplier and owns most of its CFRP component supply chain. Several months ago I began an extensive effort to track down every single bit of carbon fiber that was going into the automotive industry, accounting for:

  • Who was using CFRP?
  • On what cars?
  • Where components were being produced?
  • What types of components are being produced?
  • Why it was being used?
  • How many parts are being made?
  • And what impact will this have on the composites supply chain?

The results, which are the basis for an upcoming market research report that will be available for sale through this website, were exciting and a bit sobering at the same time. I have heard it said about carbon fiber composites in the automotive industry that, “It is a material of last resort.” From my own research I would say that this has been largely true, unless you are a designer of supercars or $1 million+ hypercars. To at least a limited degree, this truism is slowly changing. In the automotive industry, however, no matter small, everything counts in large amounts. As a word of caution, I have also heard that, “The history of advanced composites is littered with the bodies of true believers.”

First a little background. The global automotive industry produces about 85 millions passenger cars and light-trucks each year. Over the remainder of this decade some forecasts indicate annual production up to 100 million vehicles per year. Producing these cars are more than 100 OEMs, represented by approximately 1,500 unique models. The vast majority of these cars are produced using steel throughout.

Through my research, I have identified and tracked the production of more than 100 vehicles that include some CFRP materials as standard equipment. There are probably two dozen other limited production supercars that I am aware of but did not include in this study. This is about five-times the numbers that were being produced 10 years ago! The size and number of applications using CFRP continues to grow. To a great measure this is due to advancements in “snap curing” epoxy resins, new molding techniques, and out-of-autoclave curing. The effect has been to reduce the cycle times and costs for performance and safety critical components. For example, the McLaren F1 vintage mid-1990s featured a carbon fiber monocoque chassis that is reported to have taken more than 4,000 hours to build and is estimated to have cost about a quarter million dollars.

The advances available to today’s auto manufacturers are stark. Cure cycle times still common among some low-volume specialty car manufacturers are 12 hours or more; however, new materials and processing techniques have brought this down to less than ten minutes, with further improvements on the near horizon to cut even that 10 minutes in half. This opens up a number of opportunities for higher production models. Instead of maximum annual production volumes ranging between 500-2,000 vehicles per year, it is now possible to consider production volumes in the range of 20,000 to 40,000 vehicles per year. And for those of us who cannot afford (at least not yet) the price of a supercar, the cost of manufacturing a CFRP monocoque has come down by almost 2 orders of magnitude!AutoCompForecast

With these factors in mind we should expect that the volume of CFRP materials going into the auto industry should be growing dramatically – and it is! As shown in the illustration here, composites volumes declined during the height of the economic recession, bottoming out around 2010. As production of the BMW i3 got underway in 2012 and approaches full rate production over the next three years, composites volumes are projected to grow from around 13 million pounds of finished components up to around 40 million pounds! At this level, the automotive industry’s consumption of carbon fibers will skyrocket past volumes consumed for all aerospace and defense activities and make it comparable to wind energy in terms of annual consumption. These should be exciting times.

But, hold on a minute! A secular growth trend is what the industry needs to be seeing in order to prepare for major capital investment. So, who else is making a move to more CFRP? The data shows that the next big move is likely to be coming from the Volkswagen-Audi-Porsche group, which also owns Lamborghini, Bentley, Bugatti, Skoda, and SEAT brands. Volkswagen, for example introduced in very limited quantities the XL1 this year, a subcompact car with an all CFRP passenger safety cell and body work – squarely aimed at the same market as the BMW i3.

While not all of the Volkswagen/Audi/Porsche brands and models make good candidates for widespread CFRP adoption, it is well known that Lamborghini and Bugatti are big CFRP users. Bentley too is quietly using significant amounts of CFRP usage, but these are relatively small luxury brands. My analysis shows that it would take a doubling of the supercar market to equal the CFRP going to just the i3 program. On the horizon are a number of other brands which could make a difference. Alfa Romeo is introducing its 4C sports coupe this year, priced at around 50,000 euros. The new Corvette Stingray will also use some sizeable quantities. And, about a dozen other luxury automotive companies are actively developing new models and technologies to take advantage of CFRP materials to improve their fuel economy and curb appeal.

The time period beyond 2016 is a long ways off in the automotive world and much can change. While still somewhat speculative, I feel that there are enough luxury vehicles entering the market during this period of time to indicate that CFRP volumes could grow to 100 million pounds by 2020-2022. This is certainly a huge swing for the carbon fiber producers and related materials and manufacturing services, but it is still just a drop in the bucket compared to the potential for aluminum and ultra high strength steel. Plus there are a number of other issues to contend with, such as: recycling, and end-of life and landfill constraints, repair and support, insurance. I believe that the ground work for these issues has been soundly addressed but are still at an nascent commercial state. It seems merely a matter to time and perseverance before enough capacity and experience is put into place before these issues are no longer a detractor. The real issue at hand is the economics.

From my analysis, it appears that the finished cost of CFRP for automotive applications still range between $20 – $300 per pound of finished components, as compared to:

  • High-strength steel – ca. $1.10/lb
  • Aluminum sheet – ca. $2.80/lb
  • Aluminum casting – ca. $1.50/lb
  • Fiberglass composites – ca. $1.40/lb

There has to be a compelling reason to spend so much extra on the carbon fiber materials. To be sure, CFRP offer potentially 30% more weight savings compared to light weight aluminum – the lightest of the bunch. And from the Audi brand, to Tesla Motors’ Model S, and Ford’s next generation F150, we can see that this will be one of the main solution strategies for companies to meet increasingly stringent emissions requirements. That being said, my analysis shows that the incremental costs of CFRP – at least for luxury vehicles over $60,000 – have been negated by tax penalties and fees in the US and Europe. The tax savings for the manufacturer and general consumers for having low emissions vehicles and even more so for electric and alternative fuel vehicles more than compensates for the cost automobile body-in-white made from CFRP – and this is without considering reduced annual fuel costs.

To make a long story short, there is a big change coming for the carbon fibers industry. For the less affluent consumer, automobiles will be able to meet the new emissions requirements through 2025 with more conservative advanced steel and aluminum alloys, combined with smaller turbocharged and hybrid electric drivetrains. And, many of these technologies will definitely see use in up-market automobiles. The average car may shrink in size, lose some of their horsepower, and endure a reversion to 14-15 inch wheels – which may in-turn be a boon to the aftermarket industry and composites. Where CFRP will take hold is in support of very large vehicles and those targeting luxury automobile consumers – particularly those aimed at uncompromised high performance. In order to stay competitive with “the ultimate driving machine,” the other luxury brands are likely to follow suit, but it will take time…and now seems to be a good time to plan for that next shift into higher gear.

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