The North American lightweight car market is expected to register a CAGR of about 10.27% during the forecast period (2020 – 2025).
Currently, the market for lightweight vehicles is primarily driven by regulatory authorities pushing for fuel-efficiency. The lightweight vehicle's market in North America is becoming stringent to serve the strict fuel economy standards of the US CAFE requirements, which are also being adopted by Canada and Mexico.
The ideal materials for lightweight cars in this market include aluminum, high strength steel, and magnesium. In the luxury segment, carbon fiber cars, like those used in BMW, are no longer expensive and are increasingly being used in mass-market car production. North American economies are focusing on reducing the cost of materials through concentrated research to drive the lightweight car market's growth.
With the emergence of electric vehicles and an increasing ban on diesel vehicles' production of gasoline and diesel engines, the fossil fuel-run automotive industry's growth may face negative growth. However, lightweight car materials will remain a driving factor due to its application in an alternative fuel vehicle market.
Key Market Trends
Continuous Evolution in automotive AHSS technology
The demand for reducing the weight to enhance vehicle performance and safety is growing globally, and North America is one the largest for AHSS Market. As a result, Advanced High Strength Steel (AHSS), an essential material for mass vehicle reduction, has become one of the fastest-growing material in today's automotive industry.
Steel makes up around 70 % of an average automobile's weight. Compared to standard steel, AHSS enable to reduce vehicle weight by 23-35% which is around 165 to 250 kg, for a regular passenger car, saving 3 - 4.5 tons of greenhouse gases over the vehicle's total life cycle. This saving in emissions is much more substantial than the CO2 emitted during the complete production of steel needed in a car.
The steel composition involves 34% as the body structure, panels, doors, and trunk closures, giving it an energy absorption and high-strength in case of a crash. 23% is the engine and machinable carbon steel for the wear-resistant gears. 12% is used in the suspension, using rolled high-strength steel and the remainder in the wheels, tires, fuel tank, steering, and braking systems.
To produce higher strength for reduced steel section size and weight, automakers use less material, significantly reducing a vehicle's weight. The steel industry is focusing on developing different alloys for processing combinations, steel with high tensile strength and ductility, along with optimizes chemical compositions to achieve multiphase microstructures of AHSS.
Other advancements include the expanded capabilities to automotive steels that have high strength, which enable the design of thinner parts optimizing stiffness but maintaining geometries. AHSS such as Nano Steel helps deliver thinner gauges of steel and components to manufacture at room temperature.
In 2018, the technical partnership between Aston Martin and Dow had enabled the development towards AHSS and implementation of customized industry-leading solutions in light-weighting, powertrain efficiency, and vehicle electrification.
United State Remains the Largest Market
In the United States, the Corporate Average Fuel Economy (CAFE) implemented laws to improve fuel efficiency for automobiles categories by 2025. The Corporate Average Fuel Economy (CAFE) law, installed in 1975, dictates that cars' fuel economy must improve from the current 27.5 mpg, where it has been since 1990, to 37.8 mpg by 2018. Combined, cars and trucks in 2019 should average 34.1 mpg, up 35 percent from the current 25.3 mpg. There is an increasing growth rate for miles per gallon (MPG) regulation, which is growing at 5% every year for all segments of automobiles.
Manufacturers are working to reduce overall vehicle weight, which lowers the energy required to operate the vehicle and increasing fuel economy. The Body-In-White system is the critical focal point for automakers looking for fuel savings because of its weight reduction potential, importance to crash safety, and impact on compounded weight reduction for other sub-systems, such as the powertrain.
Also, materials are often not recycled and sent to landfills. Environmental Protection Agency (EPA) proposed life cycle assessment (LCA) studies to detect higher emissions over the vehicle's entire life cycle. LCA looks at resources, energy, emissions, extraction phase, end-of-life phase, and disposal, and recycling. As a result, there is growing importance being given to lightweight car technology and its recyclability process due to regulations to limit GHG emissions from vehicles.
However, even in the United States, the high cost of materials like carbon fiber and AHSS, and the ongoing research on the material mix, the growth of this industry hasn't reached its full potential.
The North American lightweight car market is moderately consolidated with existing players such as United Steel Corporation, AG, SSAB AB, POSCO, ArcelorMittal SA, and AK Steel Holding Corporation, Ltd. As the demand for the lightweight car is growing in the region, the automotive manufacturers are trying to edge over its competitors by making joint-ventures, partnerships, and launching new products with advanced technology.
For instance, Hyundai Santa Fe and the 2019 Acura RDX both relied on excessively on the steel framework., with a composition of 67% and 50% high-strength steel. Also, vehicles like 2019 Jeep Cherokee, the 2019 Mercedes-Benz G-Class, and the 2019 Subaru Forester use AHSS for improved crash safety regulations.
Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support