Aluminium is gaining traction in the automotive sector, with luxury car brands Ferrari (NYSE:RACE) and BMW (ETR:BMW) expanding its use in vehicle wiring.
Ferrari has been using aluminium in power cables, as it reduces wiring weight by up to 20%. Meanwhile, BMW says that the use of aluminium conductors has expanded into high- and low-voltage systems in its eDrive technology.
The move follows a broader trend among electric vehicle (EV) manufacturers, including Tesla and several Chinese manufacturers, that have increasingly adopted aluminium conductors to reduce vehicle weight and production costs.
According to GEM Mining Consulting, this shift does not signal the end of copper’s dominance in electromobility, but it demonstrates how sustained price pressures are encouraging manufacturers to identify areas where aluminium can be used without affecting system capability.
“When the price differential widens, manufacturers start looking more closely at every gram of copper that can be replaced without compromising system performance,” GEM Mining says.
Since 2020, the copper-aluminium price ratio has remained persistently close to or above 3.5 times, reinforcing the economic incentive to redesign components where aluminium can perform the required function.
GEM Mining says this logic has been reflected in several market analyses, which typically place the substitution threshold at a copper-aluminium ratio of between 3.5–4 times.
At the time of writing, copper futures fell below US$6.3 per pound ($9.06), giving up the previous session’s gains as investors await the Federal Reserve’s upcoming policy decision, with markets pricing in better than a one-third chance of a rate hike.
Over the past month, copper’s price has risen 3.33% and is up 11.81% compared to the same time last year.
Aluminium futures hovered around US$3,180 per tonne, at the time of writing. Over the past month, the price has risen 1.72%, and is up 20.90% compared to the same time last year.
Price is not enough
While the current price differential favours greater aluminium adoption, GEM Mining says economics alone will not drive widespread substitution.
Replacing copper requires product redesign, product modifications, investment, certification, and industrial adaptation, meaning manufacturers must weigh long-term cost savings against implementation costs.
GEM Mining explains that aluminium is not replacing copper due to it being a superior electrical conductor, but due to it offering an acceptable technical alternative in applications where lower cost and reduced weight outweigh the need for maximum electrical efficiency.
“Aluminium gains ground in applications where cost and weight matters more than maximum electrical efficiency; copper, by contrast, retains its advantage where reliability, compactness, and electrical losses remain critical,” GEM Mining says.
A study by GEM Mining estimates that material substitution could reduce copper demand by 1.5–6% by 2035. The forecast extends beyond aluminium, incorporating other materials and compounds including graphene, bimetallic conductors, and advanced carbon-based materials.
However, GEM Mining says this should be viewed as optimisation rather than structural displacement. Copper remains the preferred material in applications where electrical efficiency, reliability, compact design, and lower transmission losses justify its higher cost.
The consultancy also expects long-term copper demand to remain robust, driven by accelerating EV adoption, data centre growth, and the rollout of renewable energy infrastructure.
In that environment, aluminium is likely to serve as a market adjustment valve, easing some demand growth during periods of elevated copper prices without eliminating the need for additional copper mine supply, increased recycling, or more resilient global supply chains.
Write to Aaliyah Rogan at Mining.com.au
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