Why Companies Are Swapping Copper for Aluminium

Copper prices hit a record high earlier this year, and that has many companies looking for a cheaper option. More and more businesses are turning to aluminium as a replacement for copper in cars, power lines, and air conditioners. Both metals can carry electricity and heat, but aluminium costs about one-quarter of what copper does. That big price difference is making aluminium very attractive right now.

Aluminium does have one downside compared to copper. It only conducts electricity about 61% as well, which means aluminium wires need to be about 1.6 times thicker to carry the same amount of power. Even so, aluminium is much lighter — copper is about 3.3 times heavier — which makes aluminium especially useful in cars and electric vehicles, where less weight means a longer driving range.

Industry experts say companies start thinking seriously about making the switch when copper costs between 3.5 and 4 times more than aluminium. In January, copper was 4.3 times more expensive, and it is still around 4.2 times more expensive today. Switching metals is not cheap or easy, though. Companies have to spend money updating their factories and equipment before they can make the change.

Several major car brands have already made the move. Ferrari started using aluminium wiring in its 296 model last year, and the change cut wiring weight by 15% to 20%. Germany's BMW first tried aluminium wires back in 2011 and has kept expanding their use ever since, now using aluminium cables in both high- and low-voltage systems. Tesla has been a leader in this area, using aluminium in its Model Y since 2019 and in its newer Cybertruck as well.

Other automakers are following along. Stellantis, the world's fourth-largest car company, is also swapping copper for aluminium in its wiring. Several Chinese electric vehicle makers — including AVATR, XPeng, and Xiaomi — are using aluminium wiring in new models to save money and reduce weight. Toyota says it is always studying different materials and may switch depending on the situation, while Volkswagen says it has no broad plans to switch but does use aluminium where it makes sense.

The electricity industry is also making big changes. Prysmian, the world's largest electrical cable maker, now uses about 40% aluminium by weight — up from even less five years ago. Nexans, the second-largest cable maker, expects huge global investment in electrical grids of about €10 trillion by 2030, with aluminium grabbing a bigger share because it costs less and is easier to find. In Australia, Queensland's state-owned electricity distributor has been replacing copper with aluminium on its 210,000-kilometer network for many years, swapping out old equipment as it wears out.

Heating and air conditioning companies are making the switch too. Japan's Daikin, the world's biggest air conditioner maker, said it is working hard to cut costs by moving from copper to aluminium. U.S. company Lennox International developed special technology to replace copper coils with aluminium ones, which are lighter and less likely to rust. Carrier Global, another U.S. company, switched all its coastal air conditioning and heat pump models to aluminium coils starting in 2023 to help them hold up better near salty ocean air.