Total Vehicular Energy Use Management

Randall SchepsMarketing Director, Alcoa Ground Transportation

Chairman, The Aluminum Association’sAuto & Light Truck Group

www.autoaluminum.org

Aluminum Builds a Better Car

Reduced Emissions

Mass Reduction

Enhanced Performance

Improved Safety

Better Fuel Economy

Infinitely Recyclable

2

Aluminum Helps Reduce CO2

= Billions of Metric Tons• Aluminum already saving 300M metric tons of CO2 annually

• Bigger reductions possible

• Highly complimentary with advanced drivetrains

• Carbon neutral by 2025

12% of Global Emissions

200

250

300

350

400

450

500

550

600

650

700

2000 2005 2010 2015 2020 2025

Mt C

O2e

GHG Emissions

Transport Savings

CO2 emissions from aluminum industry

Savings from transport

3

Aluminum Delivers Life Cycle CO2 Savings

• Most CO2 emissions occur in the use phase

• Aluminum production represents only 5% of the life cycle energy

• Each pound of aluminum replacing steel saves 22.9 pounds of CO2 net

• Cradle to cradle sustainable

4

1

3

5

7

9

11

13

15

0 5 10 15 20 25

% Weight Reduction

% F

ue

l E

co

no

my

Im

pro

ve

me

nt

Small Car - Resized Engine Mid Size Car - Resized Engine Small SUV - Resized Engine

Large SUV - Resized Engine Truck - Resized Engine Small Car - Baseline Engine

Mid Size Car - Baseline Engine Small SUV - Baseline Engine Large SUV - Baseline Engine

Truck - Baseline Engine

Weight reduction & resizing 10% 6-7%

Gasoline

Ricardo Study: Aluminum Provides Fuel Economy Benefits

Source: Ricardo 5

Secondary Weight Savings Add Value

Mass and Cost Savings by Component

Source: IBIS Associates

Secondary

6

Source: IBIS Associates

IBIS Study: Aluminum Adds Value to Alternative Powertrains

$0

$50

$100

$150

$200

$250

$300

Baseline Diesel Hybrid

Steel Body Aluminum Body

Cost per 1 MPG Increase

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Baseline Diesel Hybrid

Steel Body Aluminum Body

Percent Increase in MPG

7

Leading Experts Agree: Lightweighting “Very Important” to Reach CAFE Levels

• 25% – Fuel economy improvement to come from weight

savings, as predicted by material experts and body

engineers

• 50% – Fuel economy improvement to come from weight

savings, as predicted by powertrain experts

• Lightweighting is the only option that improves safety and

fuel economy simultaneously

8

“We’ll need to spend more resources to develop lightweight structures to boost fuel mileage – but we won’t necessarily need expensive and exotic materials like carbon composites.”

-Gerhard Schmidt Chief Technical Officer & Vice President

Ford Motor Company

Aluminum vs. Other Materials

9

Strength-Constrained Areas of the Body

0

100

200

300

400

500

600

700

800

900

0 20 40 60 80 100

Pe

rfo

rman

ce v

s. C

ost

Weight Saved

Mild Steel Baseline

HSS

Aluminum 6xxx

Mg

Composite

Aluminum 7xxx

Strength Applications

0

20

40

60

80

100

120

0 20 40 60 80 100

Pe

rfo

rman

ce v

s. C

ost

Weight Saved

Mild Steel Baseline

CompositeHSS

Aluminum 6xxx

Mg

Aluminum 7xxx

Aluminum offers the highest weight save potential vs. other

metals

Stiffness Applications

Aluminum offers greater total weight save potential than

steel

Aluminum’s Economics Tell Positive Story

0

1

2

3

4

5

6

7

LME / Steel Ratio

Price DevelopmentAluminum vs. Steel

Source:

- Al: EAA LME 3 months

- Steel: MEPS

International 2008

Alu

min

um

vs. S

tee

l C

ost R

atio

10

North American Light Vehicle Aluminum

Content Continues to Climb

10.4%9.6%

8.8%8.6%

7.8%

6.9%6.1%

5.1%4.5%

3.9%

2.1%2.0%

0%

2%

4%

6%

8%

10%

12%

1970 1975 1980 1985 1990 1995 2000 2005 2009 2010F 2015F 2020F

Aluminum Share as Percentage of Curb Weight

Auto Aluminum Use At All-Time High

11

Component Aluminum Share» Heat exchangers 100%

» Pistons 100%

» Transmission cases > 98%

» Cylinder heads > 98%

» Wheels > 69%

» Engine blocks > 69%

» Drive shafts > 50%

» Knuckles > 39%

» Hoods > 22%

» Control Arms > 15%

» Bumper > 11%

» Cradles/sub-frames > 10%

» Body in White

» Wiring Harness

Aluminum Success Stories and Growth Opportunities

Growth Areas

Success Stories

12

Aluminum Builds a Better Car

Audi TT

• Light

• Strong

• Safe

• Saves fuel and CO2

• Cradle to cradle sustainable

• Economic

• Part of the solution

13

Total Vehicular Energy Use Management

Randall SchepsMarketing Director, Alcoa Ground Transportation

Chairman, The Aluminum Association’sAuto & Light Truck Group

www.autoaluminum.org