More drivers are making the switch from gas to electricity to fuel their cars. (Source: The Korea Bizwire)

SEE ALSO: Ask an Expert: Electric Vehicles and the Future of the Automotive Market

Why don’t more people drive EVs?

Electric vehicles (EVs) have a variety of benefits for drivers, the most obvious being cheaper electricity prices compared to gas. Not only that, EVs only have about a third of the parts of ICE vehicles, which results in maintenance-cost reductions by about 60 percent. There are also government subsidies that support EV manufacturers and consumers in numerous countries, and environmental regulations only look to strengthen. Despite all this, drivers have been slow to make the switch to EVs, and there are 3 critical reasons why.

1. Range

Today, EVs can travel about 200 to 400 miles on a single charge, and while this may be sufficient for most urban drivers, it’s still not enough coverage to relieve drivers of range anxiety. Low-capacity batteries are not the only problem – the weight of the car and the efficiency of the motor and converter also affect range. Put simply, even if a battery could hold more energy, it won’t result in increased range if the car is too heavy or the motor is inefficient and uses up too much energy. Automakers have to come up with comprehensive solutions to improve the battery capacity and motor efficiency as well as lightweight their vehicles.

Drivers are often wary of their EVs running out of juice where there are no charging stations. (Source: Sandman YouTube Channel)

2. Charging Time

EVs currently take up to several hours to fully charge, depending on the battery. Although there have been advancements in charging systems that allow for shorter charging times, the average charging duration cannot compete with the 3 to 5 minutes people spend at gas stations.

3. Charging Stations

Despite the technological leaps made in the development of EVs, charging infrastructure has not maintained the same pace. Gas stations outnumber charging stations in every country, and it will take time to figure out a model to commercialize charging stations and make the business more profitable.

Charging stations have not yet been commercialized as gas stations have. (Source: Coinfeeds)

Why EVs are still driving toward a bright future

Although there are still challenges to overcome, one of the greatest drivers of widespread EV adoption is national policy. A growing number of countries have declared they will limit or even ban ICE cars altogether by 2020. Policies are already in place to support a more environmentally sustainable auto industry, and companies are working hard to navigate and capitalize on the changing market environment.

This will bring about a wealth of new opportunities for related industries. That’s why automotive, materials, electronics and chemical companies around the world are investing heavily in technology to preempt this market, and first movers will gain a tremendous advantage.

POSCO is one of the companies looking to lead the global EV materials market and has been investing in and developing innovative solutions for EV manufacturers. POSCO has designed an ultra-lightweight yet strong chassis and developed the necessary parts to bring it to life. POSCO is also currently working with auto manufacturers, giving them access to POSCO’s EV chassis design expertise as well as its newly-developed materials.

POSCO has designed an ideal chassis for electric vehicles. (Source: News Tomato)

In addition, POSCO works closely with each of its affiliates including POSCO Daewoo, ICT, ESM and ComTech that are highly specialized in their respective fields. In cooperation with its affiliates, customers and academia, POSCO is in the process of developing innovative technologies for batteries, electric motors and charging infrastructure. As such, the EV sector has become a core business area for POSCO.  

Everything from the EV chassis and battery to the motor and charging infrastructure is codependent. Therefore, in order to develop an advanced EV that meets the needs of consumers, an integrated approach is vital. POSCO is in prime position to work with all of its affiliates under One POSCO and gear toward a future of cars running on electric motors.

Cover photo courtesy of The Wellingtonian.

The 2018 North American International Auto Show brought the biggest names in the auto industry together for a show and tell. (Source: News Atlas)

Continuing on what we saw during the past few years, the focus this year again was on improving safety, performance and design, all at the lightest weight possible for fuel economy. While there have been debates in the past about the best lightweight material, there was a clear winner at this year’s NAIAS. Almost every car, including the 2018 Car of the Year, was clad in advanced high-strength steel (AHHS) and significantly lighter than their predecessors.

Take a look at some of this year’s steel-clad cars.

SEE ALSO: 5 Reasons Why AHSS Tops the Market for Lightweight Auto Materials

2018 Car of the Year: Honda Accord

The 2018 Honda Accord took home the prestigious title of Car of the Year due to its lightweight and improved strength and performance. The 2018 model contains 29 percent ultra-high-strength steel (UHSS) in its chassis and 54.2 percent high strength steel (HSS). With these applications, the Honda Accord achieved a weight reduction of 110 to 176 pounds while improving its body torsional rigidity by 32 percent and its bending rigidity by 24 percent.

2019 Chevy Silverado

The all-new Chevy Silverado comes armed with plenty of steel. One of the features that contribute to its improved safety is the bed floor made of roll-formed HSS. Also, 80 percent of its fully-boxed steel frame is made of HSS and AHSS forms the Silverado’s safety cage. Overall, the new model is taller and 7 inches wider than before. Nevertheless, the all-new Silverado is 450 pounds lighter with a 10 percent increase in torsional rigidity than the previous model.

2019 Dodge Ram 1500

The 2019 Dodge Ram 1500 is another steel-intensive vehicle revealed at NAIAS. About 98 percent of this year’s model is made from HSS, and is the lightest, longest and most efficient frame in the half-ton truck segment. The wheelbase and crew cab is 4 inches longer than the previous model. The Dodge Ram 1500 also has several new safety features. The unique front-splayed frame rail technology, frame-mounted HSS tire blockers and fully-boxed side rails allow the car to absorb more energy in case of impact and minimize structural damage.

2019 Kia Forte

The 2019 Kia Forte is taller, wider and longer than before with 54 percent of its chassis made of AHSS. It also has a 16 percent stiffer body-in-white and the new seat frames are lighter yet stronger as Kia has its eyes on top ratings from the Insurance Institute for Highway Safety (IIHS) for the second consecutive year. The lighter and stronger vehicle will consume about 9 to 20 percent less fuel as well as drop noise levels by 5 decibels.

Why the Steel Overload?

As mentioned above, the latest cars are steel-intensive and automakers increasing the amount of HSS, UHSS and AHSS in their mix of materials. Of course, the main reason for this is steel’s innate properties that make it the ideal solution for automakers looking to cut back on weight and still satisfy safety standards. However, automakers also learned a good lesson from automakers who chose another popular lightweight material – aluminum.

SEE ALSO: Materials Matter: Why Steel Beats Aluminum in the Sustainability Debate

Back in 2014, Ford released its F-150 with an all-aluminum body. The move was bold and the cars sold fast as it was a whole 700 pounds lighter than previous models. Consumers got to drive away with a drastically improved fuel economy, but it didn’t take long for them to realize the big, expensive problem with aluminum bodies: repairs.

The 2015 Ford F-150 has an all-aluminum body. (Source: Hennessey Performance)

Although steel and aluminum are similar in terms of its lightweight properties, aluminum reacts differently than steel under heat. Aluminum does not have metal memory, while steel does, making it hard to reshape and repair following an accident. Welding aluminum also takes much more skill and precision than steel, and there are few repair shops that are equipped to handle aluminum. As a result, drivers not only have a hard time finding repair shops for their aluminum cars, they have to pay a hefty price for repairs compared to repairs for steel cars. For example, Jalopnik reported one of the first cases of the F-150 repairs back in 2015 cost USD 17,000 and a month-long repair time.

Of course, this was a rare case highlighting the steep learning curve of repairing aluminum vehicles, but it also highlights the fact that steel is still the norm when it comes to automotive materials, and judging from the 2018 NAIAS, it’s going to stay that way for quite some time.

Cover photo courtesy of Honda of Lincoln.

CEO Kwon explores CES 2018

As such, CEO Kwon made his first official visit to the 2018 Consumer Electronics Show (CES) in Las Vegas earlier this month to stay on top of the latest trends in connectivity and smart solutions that can be applied to the manufacturing process in smart factories.

SEE ALSO: POSCO CEO Ohjoon Kwon Visits CES 2018

Ultimately, a smart factory for POSCO would entail using smart sensors to pick up data, smart analysis through AI and automated production processes. Moreover, the smart factory would store and analyze its big data and apply it to make future improvements and prevent malfunctions. Aligned with many of POSCO’s business growth engines, major topics and themes at CES 2018 included smart homes, smart cities, autonomous cars and AI, and more than 3,900 companies put forth their best innovations.

Smart Connectivity

As more and more cities undergo smart transformations, the next big trend will be data collection and analysis through 5G connectivity. It was no surprise to see numerous innovations in smart transportation, smart grid, public safety, healthcare, data analytics and more at CES 2018. Moreover, city officials from early-adapting cities such as Kansas City, Miami and Las Vegas took to the stage to discuss their cities’ smartization plans. Some of the topics discussed included using GIS mapping software, smart construction, inclusive technology and autonomous transportation to enhance citizens’ productivity, efficiency, safety and well-being.

CES 2018 was a platform for smart city discussion. (Source: Bosch)

CEO Kwon visited related booths to learn about new technologies POSCO could apply to its businesses. Currently, POSCO’s smart factories are run by POSCO ICT’s smart platform called PosFrame, which allows the factory to apply a digital genome map to operations via data collection, instantly convert smart factory initiatives in domains, act as a common platform for new technologies and apply the same, standardize smart factory model to other facilities through reusable software.

Also at this year’s CES, POSCO ICT signed an MOU with DPR Construction, a leading smart construction company to apply PosFrame to construction sites for more efficient, cost-effective and smarter construction processes.

Smart Transportation

Another major theme at this year’s CES was mobility. Namely, autonomous and electric mobility. Companies from all across the board from traditional car manufacturers and software companies to gaming companies lined up to showcase their new innovations.

Even as the market for sustainable EVs and autonomous EVs look to expand in 2018 and beyond, EVs only make up about 1 percent of the global fleet of cars and there’s still a ways to go before EVs become the norm. Drivers need to feel safe in their EVs or autonomous EVs, want greater range on a single charge and need to see more charging infrastructure in their communities before making the switch.

SEE ALSO: Ask an Expert: Electric Vehicles and the Future of the Automotive Market

What’s more is that just because a vehicle runs on electric batteries, it doesn’t automatically mean the vehicle is eco-friendly or transmits less harmful emissions. Manufacturers and consumers alike have to take a lifecycle approach to assess the car’s impact on the environment from production to end of life recycling.

POSCO works with numerous partners to develop leading solutions for electric vehicles.

That’s why POSCO is working with automakers to come up with vital solutions in the auto industry for a greener future. It supplies partners with an advanced high-strength steel (AHSS) called POSCO GIGA STEEL that is both lightweight and super strong, allowing cars to travel with less energy without compromising passenger safety.

POSCO is also a lithium provider and has developed an innovative technology to speed up the extraction process, saving time, costs and damage to the environment. It also works with car makers to apply premium electric steel to partners’ electric motors to increase efficiency and cut costs.

With so many exciting new innovations and technologies surrounding EVs, POSCO will undoubtedly play a significant role in ensuring automakers have the tools they need to realize a green future.  POSCO will work to stay ahead of newly emerging technologies to enhance the efficiency, sustainability and performance of all of its solutions.

More and more automakers are adding EVs to their fleet. (Source: Engineering and Technology)

While all this sounds promising for the environment, EVs don’t automatically translate into lower GHG emissions. According to World Auto Steel (WAS), the emissions from vehicle production will be greater than the amount of emissions from driving. As such, it is becoming increasingly important for manufacturers, policymakers and consumers alike to view material options by considering its life cycle assessment (LCA).

World Auto Steel Case Study

WAS conducted a case study in which they compared two popular lightweight materials for EVS; aluminum and Advanced High-Strength Steel (AHSS). The study followed the University of California Santa Barbara Automotive Energy & GHG Model (UCSB Model) for a comprehensive analysis of each material’s total energy use throughout its entire life cycle, from production to end of life recycling. For the study, WAS examined 1,000,000 BEVs of equal range that were made up of either entirely aluminum or AHSS.

BEVs made of AHSS require over 15 percent less energy than aluminum cars. (Source: World Auto Steel)

The study found that automakers can make over 17 percent more BEVs made of AHSS than aluminum BEVs with the same amount of energy. In other words, with the energy it takes to make 1 million aluminum BEVs, automakers can make 1.17 million AHSS BEVs.

Why is AHSS More Energy Efficient?

Aluminum production requires 8 times more energy per kilogram than steel production because the production process of aluminum is much more complicated and involves more steps than steel production. The aluminum BEVs in the study used up 30 percent more energy than those made from AHSS throughout its entire life cycle. Plus steel is 100 percent recyclable and can be reused almost indefinitely.

There are many sources of emissions output involved in the entire life cycle of a vehicle. (Source: World Auto Steel)

This poses a serious need to reexamine existing policies and regulations that only seek to reduce tailpipe emissions. By also taking into account emissions from the production of materials all the way to how a car is disposed at the end of its life cycle, automakers can grasp a better picture of the real impact of their choices on the environment.

A Sustainable Choice

As a solution-providing partner for automakers, steelmaker POSCO designed the perfect AHSS for cars that is lightweight, extremely strong, highly formable and environmentally friendly. POSCO GIGA STEEL belongs to the highest category for tensile strength of greater than 1GPa (Gigapascal). It can withstand more than 100 kg of force per square millimeter, making it 3 times stronger than aluminum. It is also 3.5 times cheaper than aluminum and 2.1 times cheaper to manufacture.

SEE ALSO: Infographic: Driving the Future with POSCO GIGA STEEL

POSCO GIGA STEEL is three times stronger than aluminum.

In 2016, POSCO sold 9 million tons of steel sheets for cars, making up 10 percent of the entire global automotive market for steel sheets. POSCO GIGA STEEL was designed to further improve the performance and efficiency of POSCO’s auto partners around the world. As the auto industry heads towards a future where environmentally-friendly EVs become the norm, POSCO will strive to equip its auto partners with the materials and tools necessary to stay ahead and competitive.

Stephen Zoepf is the executive director at the Center for Automotive Research at Stanford University.

To kick off the forum, Stephen Zoepf, executive director at the Center for Automotive Research at Stanford University gave a presentation called “Electric Vehicles: Adapting to a Changing Marketplace” to share his insights on what future markets will look like and implications for automakers, suppliers as well as consumers.  

Here are the key takeaways.

The Future is Going to Look Very Different

According to a report by RethinkX, an independent research group, 6 trillion U.S. passenger miles will be driven in 2030, up 50 percent from 2021. Of those miles, 95 percent will be driven in self-driving, electric and shared vehicles and only 5 percent of those miles will be driven by internal combustion engine (ICE) vehicles.

The report goes on to say that autonomous EVs (A-EV) will make up 60 percent of the U.S vehicle stock, and those vehicles will be part of a shared-mobility service. As more people start to share cars, the overall number of vehicles on U.S. roads will drop from 247 million in 2020 to 44 million in 2030.

SEE ALSO: Going Autonomous: The Transformation of the Transportation Industry

The change is already happening. In 2016, shared-mobility companies such as Uber and Lyft drove 500,000 passengers per day in New York City, which is triple the number of passengers from 2015. Today, more and more automakers like Tesla and GM are also entering the shared-mobility market.

EVs are already becoming prominent in major cities around the world. (Source: Time)

The findings illustrate a future where people drive more miles with fewer cars, which are fueled by electricity, and shared instead of owned. It’s a radical visualization of the future, but one that is driven by economic forces.

By 2021, shared vehicles will be 4 to 10 times cheaper per mile than private vehicles, and American households will save an average of USD 5600 every year by switching to shared EVs from cars fueled by gas, according to RethinkX.

Zoepf shared another report by ARK investment Management which echoes the finding above- in the next ten years, people will drive three times more kilometers using half the number of cars and the number of EVs on the road will increase 10 fold.

What It Means for Car Manufacturers and Suppliers

A shrinking vehicle fleet consisting of mostly EVs can only mean one thing: a major disruption to the current automotive market.  

Right now, the average lifecycle of a car in the U.S. is 11 years. However, the majority of a car’s total mileage is driven in its early years. It’s the same for shared vehicles, but they are driven about 80,000- 90,000 km per year, 10 times the distance of privately-owned cars. What this shows is a compression of the vehicle lifespan in its first 3 to 4 years.

These statistics pose critical concerns for automakers.

Will overall vehicle sales decrease in the coming future? According to Zoepf, that’s the wrong question to ask. Instead, automakers should be asking “will I make money?” Automakers have a couple of choices. They can either adapt early on and manufacture EVs and/or A-EVs at a competitive price, or become a shared-mobility provider. Early movers such as Tesla, GM and Volvo are already shifting their business strategies to fit these models.

GM recently launched Maven, a car-sharing service. (Source: The Verge)

Another question to ask is how these trends will affect vehicle design. With shortened vehicle life-cycles, manufacturers can either design cars to last only 3 to 4 years for quick replacements, or opt for the aviation model where the vehicle will be built to last, but the interior parts, such as seats, will be replaced frequently. Whatever route manufactures choose to take, gaining a competitive edge in vehicle and service quality early on will be key.

What Will This Mean for Vehicle Material Suppliers?

If building cars to last is no longer a primary priority, will car makers downgrade their materials? The short answer is not a chance.

Through a customer survey study Zoepf conducted of 60,000 Zipcar customers, he showed that the number one factor when choosing a car is safety. However, there is no one, ideal model or type of car that is preferred in a shared mobility framework. The purpose of the trip determines the type of vehicle, and the success of a shared mobility service provider will depend on the variety of cars it can provide – all with competitive safety ratings.

POSCO ICT already has ChargEV stations set up across Korea. (Source: POSCO ICT)

The supplier’s role will be to continue providing high-quality materials that can boost the safety and cost competitiveness of future vehicles. Steel suppliers have to keep developing lightweight and high-strength steels like POSCO GIGA STEEL, and research new materials that can boost the competitiveness of EVs such as POSCO’s Hyper NO for motor cores, battery materials and POSCO ICT’s EV charging service and infrastructure.

There remain numerous challenges that lie ahead for a greener and safer future with EVs and A-EVs, and it might take longer than experts predict for lawmakers, corporations and consumers to all agree on an optimal mobility model. However, change is already underway and automakers and suppliers alike need to strategize and adapt early on to take advantage of the upcoming opportunities.

For more information on how advanced automotive steel can benefit automakers looking for lightweight and sustainable steel solutions, take a look at our infographic on POSCO GIGA STEEL or read the full report here. 

Cover photo courtesy of GOV.UK.

POSCO hosted the 2017 Global EV Materials Forum at the Songdo Global R&D Center in Incheon.

POSCO welcomed more than 380 local and overseas customers to the forum where they announced the current status of POSCO Group’s EV projects and strategies. The company also showcased its core EV technologies for high-value-added products such as motors, batteries and lightweight chassis/bodies.

During the forum, POSCO highlighted customer needs, market trends and development statuses in three areas: lightweight materials, traction motor cores and batteries. POSCO researchers also gave presentations on POSCO’s high-value-added products and solutions to share market insights and technological developments with the participants.

Participants listen to presentations at the 2017 Global EV Materials Forum.

In his keynote speech, In-hwan Oh, president of POSCO, said, “POSCO is in full preparation for the future of an electric vehicle ecosystem, to become a reliable partner to our customers.”

There were also external speakers at the forum, including Stephen Zoepf, Executive Director of the Center for Automotive Research at Stanford University, who spoke about “Electric Vehicles: Adapting to a Changing Marketplace.” Another external speaker was Martin Woehrle, senior director of BMW Korea, who gave a presentation on the trends in EV development.

In addition, POSCO held a separate exhibition at the venue consisting of four key product zones: motors, batteries, light-weight chassis/bodies and charging infrastructure. There was also an EV model on display in the Highlight Zone for a better understanding of the structure of EVs.

Visitors examine the electric Nissan Leaf

On display In the lightweight chassis/bodies exhibition zone was POSCO GIGA STEEL for lightweight chassis/bodies, which is lighter but much stronger than existing automotive steel sheets. Also on display was POSCO’s lithium materials for EV batteries; POSCO is the first company in Korea to commercially produce lithium for EV batteries.

In the motor zone was POSCO Daewoo’s a high-efficiency traction motor core for EVs made with POSCO’s Hyper NO, its highest-grade, non-oriented electrical steel. POSCO is already supplying it to major automakers.

The charging infrastructure zone showed POSCO ESM and POSCO Chemtech’s core materials of EV batteries, such as cathode and anode materials. In addition, POSCO ICT is the only company in Korea to provide a total-service electric vehicle charging infrastructure, including supply, installation and operation to membership management and supplementary services.

To close, POSCO pledged to become a “Total Solution Provider” for its partners in the auto industry bracing for the age of electric vehicles with its innovative technology, premium products and customized services.

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Why Should People Care About Autonomous Transportation?

Autonomous transportation is emerging across the world, from personal vehicles to Tesla’s proposed semi trucks that drive in convoy with a lead vehicle handling autonomous follow trucks. Intel is also planning to test a fleet of one hundred autonomous cars and Hyundai’s planning to showcase its self-driving technology at the biggest winter sports event of 2018.

While many have heard of self-driving cars and other road-based vehicles, it may come as a surprise to learn just how far technology has advanced in autonomous transportation. The Swiss bank UBS, suggests that autonomous airplanes could be in place by 2025, a feat that would save airlines $35 billion a year. Clearly, the benefits are drastic and it is becoming essential for companies to invest in making autonomous travel work.

Even further into the future, companies like Next Future Transportation are envisioning pod travel, through which individual vehicles will autonomously transport people from point A to point B.

Next Future Transportation’s autonomous pod (Source: Next Future Transportation)

No matter the type, the economic impact of autonomous transportation technology is unavoidable. Boston Consulting Group expects that the driverless car market will be worth $42 billion by 2025 and $77 billion by 2035, and IHS suggests driverless car ubiquity will hit around 2050.

In terms of what these automated vehicles offer to the public, the Eno Centre for Transportation reports that if 90 percent of American roads were autonomous, accidents would drop from 6 million a year to 1.3 million; deaths would fall from 33,000 to 11,300. Add in better traffic conditions, higher fuel efficiency and extra time gained from not driving, and it’s easy to see why companies are taking notice of this tech sector.

Who is Investing in Autonomous Transportation?
Autonomous transportation entails investment from various industries from materials to technology, and major players are making early moves. Tesla is a good example of a specialty vehicle company determined to see autonomous transportation become a worldwide reality.

Big names in traditional transportation are also jumping aboard. General Motors purchased Cruise Automation, and Ford has invested in an AI startup, Argo AI. Audi has created a subsidiary, the SDS Company, focused on self-driving technology, and BMW has formed an alliance with Intel and Mobileye.

There are also auto suppliers getting into this market, such as Magna, a supplier that is manufacturing vehicles as well as providing the parts to help more traditional companies jump into automated vehicles.

Tech giants like Microsoft are getting involved, too, collaborating with automakers to include their own technology in self-driving vehicles, as well as to research and develop automated transportation technology.

Whether companies are involved in creating the actual vehicles that will be automated, providing security and safety features, pursuing further research, or providing the materials needed to create these vehicles of the future, it is safe to say that this industry is growing rapidly.

Autonomous Transportation and the Steel Industry
A shift toward autonomous transportation is good news for the steel industry. At first glance, it seems steel consumption will decrease as fewer car accidents will lead to less demand for repair parts and more room to use other materials for aesthetic purposes. However, demand for high-strength, premium steels that are highly sought after in traditional cars will continue to increase.

Materials like POSCO GIGA STEEL provide greater strength and safety for automated vehicles, an important consideration when one considers a road full of cars driving themselves. While people may no longer be behind the wheel, they will want to know that their cars, and the cars around them, are made to the highest safety standards. Safety regulations for traditional cars are only getting tougher, and that won’t change with autonomous vehicles.

POSCO’s PBC-EV made with POSCO GIGA STEEL

High-strength steel allows car makers to lightweight their vehicles without compromising safety. POSCO GIGA STEEL’s lightweight properties make it a sustainable solution for automated vehicles that aim to leave a minimal carbon footprint and maximize fuel efficiency. Even better, it is affordable; an important factor considering the overall cost of the technology and hardware that goes into automated vehicles.

The steel industry will also see a boost in the need for accompanying facilities for automated transportation, including manufacturing plants, parking structures, charging stations, smart roads and so on. While automated transportation may be high tech, there will be plenty of opportunities for those in the steel industry to provide material solutions to a rapidly growing market.

Cover photo courtesy of Auto Evolution.

The 2008 Financial Crisis was a blow to the global automotive industry and its suppliers. It took years to recover, but the economy did start showing signs of growth. McKinsey&Company’s 2013 report, The road to 2020 and beyond: What’s driving the global automotive industry, painted a positive picture of the global automotive market with profits projected to reach EUR 79 billion by 2020, up from EUR 54 billion in 2012, with China responsible for 60 percent of profits.

Their 2016 report, Automotive revolution – perspective towards 2030, offered a similar outlook. Overall global car sales will continue to grow, but at about a 2 percent growth rate, down 1.6 percent from the last five years. New market trends such as electric/autonomous vehicles, shared mobility and stricter environmental regulations will disrupt the market with new challenges and opportunities, but what remains constant is that the majority of growth in global automotive sales will be lead by the rising middle class of emerging markets, namely in India and China.

Thousands of vehicles are scrapped in the Chinese government’s efforts to reduce emissions. (Source: The Daily Mail)

Subsequently, China reached record vehicle sales in 2016. However, in April 2017, it recorded the lowest number of sales in the past two years for passenger cars, down 3.7 percent from 2015. This follows a national sales tax rise early in 2017 to 7.5 percent, coupled with a general decrease in demand for cars as consumption is reaching a plateau. Moreover, China’s sales tax will increase again to 10 percent in 2018.

India’s Booming Automotive Industry

Unlike China, India’s automotive market shows little signs of slowing down. India is now the world’s fastest growing economy as their GDP is projected to increase by 7.2 percent from 2017 to 2018. Their middle class is estimated to triple by 2025, reaching 89 million households.

The government of India is looking to the automotive industry to lead India’s economic growth, as outlined in its Automotive Mission Plan for 2016-2026 and “Make in India” initiative. Under such plans, the government will work towards creating an additional 65 million jobs in the automotive market and a 500 percent increase in vehicle exports by 2026.

A full parking lot of Renault cars reflects the massive automotive market in India. (Source: The New York Times)

It’s no surprise that Foreign Direct Investment (FDI) is pouring in. From 2000 to 2016, India’s automotive industry alone attracted USD 15.79 billion in FDI. For investors, India’s growing middle class of consumers is as attractive as their vast and low-cost labor.

POSCO Maharashtra in India

POSCO Maharashtra is one automotive supplier that is echoing the growth of the Indian automotive market. Their 2Q17 unaudited earnings report showed significant growth from just a year before in 2016. The reported revenue was USD 331.7 million, compared to USD 174.7 million in 2016. The company’s operating profit was USD 32.6 million, up from USD 3.5 million in 2016. Finally, their net profit was USD 22.9 million, another significant increase from USD 15.9 million in 2016.

*Earnings figures were converted from Korean won to U.S. dollars using August 22, 2017, exchange rates.

The POSCO Maharashtra Plant in India

In May of this year, POSCO Maharashtra signed a MoU with Essar Steel to supply 1.1 million tons of flat steel products during the 2017 fiscal year. This is the second year of partnership between the two companies, but the volume of steel POSCO Maharashtra will supply is 30 percent higher than in 2016.

The growing business reflects the work philosophy of POSCO Maharashtra employees: “If [we] supply quality material, they’ll come back again and again. So that’s what we’re doing right now. Although our products might be priced a bit higher in the Indian market, we are supplying quality material and our customers continue to be loyal because they understand that value.”- Chetan Waghchoure, sales representative for POSCO Maharashtra. Read the full interview here.

POSCO Maharashtra’s Chetan Waghchoure during an interview with The Steel Wire

POSCO Maharashtra is taking full advantage of the thriving automotive industry in India and continues to expand its business by reducing production and inventory costs, increasing performance and efficiency and planning to incorporate AI technology into their future production processes.

Market indicators point to India to drive the profitability of the automotive industry. India’s growing consumption of vehicles, open business environment and vast labor force will continue to attract foreign investment and new businesses. The best part is that India is not even close to being fully developed, meaning brighter prospects for future growth and good news for manufacturers and suppliers.

Compared to the world’s very first cars, today’s cars are faster, stronger, safer and have more sophisticated designs. As alternative materials like aluminum are increasingly being used for car parts that were originally made of steel, some even refer to this trend as a “material war.”

“Material War” in the Auto Industry

Recently, various substitutes for steel have entered the picture and are being applied in commercial vehicles. The most commonly used materials are aluminum and CFRP (Carbon Fiber Reinforced Plastic).

Beginning in the 1930’s, aluminum was primarily used as a lightweighting material for race cars and the outer panel of a vehicle. On the day of the Eifel race, the Mercedes-Benz weighed over the maximum limit and in an attempt to resolve this, the white paint was stripped from the frame, leaving the car’s aluminum frame completely exposed. This is how the Benz got its famous nickname, the “Silver Arrows.”

Pictured is the Mercedes Benz “Silver Arrows” racecar with its paint completely stripped off to reduce the weight. (Source: Daimler AG)

Safety regulations were less strict then than they are today. If there was an accident, the outcome would most likely be a severe injury or even death. With the goal of increased protection, researchers began to use tubular frames made of chromium molybdenum steel in order to reinforce the rigidity of the vehicle.

As the 1970’s rolled around, CFRP, a material that was already being applied in the aerospace industry, made an appearance in Formula 1 and automotive researchers quickly began discovering its potential and value. Soon enough, CFRP was considered an ideal material for race cars.

The Audi A2 and A8 made with aluminum car frames during the early 2000’s (Source: Audi AG)

The rapid implementation of new substitute materials in the motorsports industry set a precedent for the auto industry as well. In the early 2000s, Audi shocked the industry by presenting the A2 and A8, two vehicles with car frames that were made completely out of aluminum. In 2015, BMW created a large-sized sedan made of CFRP, which was only used in a limited number of cars. This stunned consumers and the industry yet again. As advances were made with aluminum and CFRP, it seemed that steel would inevitably lose its place in the automotive material industry.

However, those who believed that the age of steel was over forgot one thing: steel is constantly evolving. While it is true that aluminum and CFRP could replace steel and that they are lighter, the disadvantages that come with these materials confirm that steel is a much more efficient material.

Aluminum

Aluminum, for example, is lighter than steel, but because it has less strength, thicker pieces need to be used. In order to achieve the same level of strength as steel, it needs to be mixed with other materials. Also, aluminum has a low melting point and easily leads to the formation of the oxide film, a factor that makes it difficult to weld. The high thermal conductivity makes the heat that is produced at the time of welding spread, making the material more brittle.

These disadvantages mean aluminum has to be welded in other ways such as riveting, a method of mechanical joining using thick mushroom-shaped nails or adhesive. If the aluminum is not tightly joined during the riveting process, oxide films form in between the cracks resulting in fatigue failure. If a tackifier was used in the process, an impact or collision could easily rupture the adhesive lining. Addressing these problems, while also ensuring that the frame is durable and light, has proved to be a much more expensive process than manufacturing a traditional steel car frame.

As such, numerous factors including durability, safety, and efficiency must be considered when choosing a material to be applied to a car.

From the 1930s to the ‘70s, it was possible to use aluminum in race cars because the vehicles were only used for one or two races. The aluminum pieces were hammered into shape by hand or joined together by rivets, but mass production of aluminum car frames was a very difficult operation. To this day, aluminum is still a difficult material to work with due to its high cost and the complicated technology involved in the production process.

CFRP

CFRP, which is known to be lighter and stronger than steel, also has several issues. Although a method for mass production has recently been established, it requires a much longer production time (the time allowed for one product to be produced) for a car body or shell, meaning that it also yields higher labor costs.

The McLaren MP4/1 was the first car frame to be made from CFRP.

Recently, Boeing and BMW began to research ways to recycle CFRP, but unlike steel or aluminum, it is fundamentally impossible to melt CFRP and give it a “new life”. Another reason why it is not an eco-friendly material is that various chemical products are used in the manufacturing process.

Also, 80% of carbon fiber production, one of the core materials in CFRP, is used by the aviation industry. Because the demand is much higher than the supply, it is much more expensive than steel and has yet to fully make its way into the automotive industry.

Because these shortcomings have not been addressed, researchers have started to turn their eyes back to steel. Even Audi, which once considered its aluminum car frames a major strength, has adopted steel to create the car frame for their newest sedan. Other major automakers still continue to look to steel as the main material as well.

The Shift Back to Steel

The reason for the shift back to steel is because it not only addresses certain disadvantages of alternative materials but also because it is a more affordable choice. The launch of POSCO GIGA STEEL and PosM, in particular, introduced a whole new level of steel.

Audi has turned away from a fully aluminum car frame and has begun incorporating high-tensile steel plates, as indicated by the purple portions of the car frame.

[clickToTweet tweet=”PosM is POSCO’s unique brand of steel that goes beyond the limits of traditional steel plates and exhibits a new level of performance.” quote=”PosM is POSCO’s unique brand of steel that goes beyond the limits of traditional steel plates and exhibits a new level of performance.” theme=”style6″]

PosM includes three different series of steel. The “E Series” focuses on elongation, the “Y Series” focuses on the yield strength and the “B Series” balances the benefits of the two.

The highlighted parts represent the parts that have been applied to the “E Series” of PosM

PosM “E Series”

The “E Series” was once thought to be only theoretically possible and has long been known as a dream material amongst the world’s leading steel companies. This is because it can meet two demanding conditions at once: strength and formability.

Not only does it have 2-9 times more processability compared to existing materials, it also has an excellent ability to absorb impact, which can make a car safer when used in those engine room parts that absorb and disperse impact.

Many steel companies attempted to produce this material but were not able to complete it due to difficulties in production. However, in 2008, POSCO successfully developed this material for the first time and made it available for purchase.

The highlighted parts represent the parts that have applied the “Y Series” of PosM.

PosM “Y Series”

The “Y series” is used for the parts of a car that protect the passengers, especially because of the yield strength, which represents the strength of a material until it becomes deformed, is quite high. This includes, for example, filler parts that prevent the passenger compartment from becoming damaged in the event of a collision.

PosM “B Series”

The “B series” has both the benefits of the “E series” and “Y series”. It is one of the best materials that can be formed by cold forming, which is a simpler process than what is used to make Hot Press Forming (HPF) steel. Because it is easy to process, it can be manufactured into complex shapes and yield a much lower processing cost.

Until now, there has never been a steel that could exhibit both high strength and durability like PosM has. PosM, first developed by POSCO in 2016, is an indispensable material for automobiles.

Through PosM, which exhibits next-level performance compared to existing advanced high-strength steel solutions, steel is once again being considered as an essential material in automobiles. Also, POSCO GIGA STEEL is rapidly advancing to meet the needs of today’s evolving industry, leading the advanced strength steel market.

POSCO GIGA STEEL, with outstanding processability, affordability and a tensile strength that is over three times that of aluminum with the same thickness, will continue to be a very important material in electric vehicles (EVs) which define the present and future of the automotive industry. It will help overcome the limits of batteries used in EVs and allow the vehicle to travel longer distances with its lightweight qualities and make the car body safer by satisfying the most stringent of safety standards.

In addition, the advantage of being more economical, cleaner and easier to recycle than other materials is necessary for an age where consumers value eco-friendly solutions. As long as cars exist, steel will always be one of the most important materials. Various manufacturers are already turning their attention to hybrid car frames that utilize a combination of aluminum, magnesium and carbon composites, with steel as the main focus.  As advanced high-strength steel continues to make improvements it has the potential to replace the need for these other materials altogether.

Automobile development continues to move forward with steel, and at the crux of this progress is POSCO GIGA STEEL.

Read part one on how POSCO GIGA STEEL goes beyond the limits of traditional lightweight materials and part two on how POSCO GIGA STEEL opens the door to the future of the auto industry.

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Below, The Steel Wire speaks with Choi Jaeyong, Manager at POSCO’s Environment & Energy Business Department and currently a research fellow at the World Steel Association, to discuss sustainable manufacturing trends in the steel industry as well as the evolving automotive steel industry.

What are some of the most exciting initiatives taking place in the steel industry to combat greenhouse emissions and to create more sustainable production methods?

First, we must realize that one of the main causes of greenhouse emissions comes from using fossil fuels for the reduction of iron ore. Therefore, any ideas to improve this process and reduce the use of fossil fuels will also help reduce greenhouse gases. One of the most exciting initiatives taking place in the steel industry is replacing coke with hydrogen on a partial basis as a reduction agent. However, this is only effective if the hydrogen is produced by non-carbon energy sources.

[clickToTweet tweet=”“The sustainable life cycle of steel helps automakers recycle old automobiles into brand-new cars.” ” quote=”“The sustainable life cycle of steel helps automakers recycle old automobiles into brand-new cars.” ” theme=”style6″]

In addition to finding fuel alternatives for blast furnaces, advancements in smart factory technologies, such as AI and IoT, are also helping create more sustainable production methods while significantly enhancing the decision making process. For instance, the digitalisation of the control systems to reduce variations in process parameters has helped reduce energy usage as well as unexpected defects. Moreover, IoT can help employees at worksites by preventing industrial accidents with regards to machinery and equipment.

What do you think steelmakers should do to become more energy efficient?

First of all, steelmakers should work to achieve best-in-class operational standards across all processes. This includes improvements in engineering, operations, reliability, yield, health, and safety. Second, employees should stay up-to-date on the latest developments in steel production to ensure that advancements are shared utilized across the entire industry. Third, we must use collaborative and innovative R&D techniques to make improvements throughout all processes. POSCO is already practicing the first two very well while the third continues to be a priority for POSCO CEO Ohjoon Kwon.

I believe there is no one single solution for energy management; however, if those of us in the steel industry remain enthusiastic about finding creative energy saving solutions, new ideas will continue to arise and evolve.

From your experience working with POSCO’s energy management systems, can you tell us what POSCO is doing to become more energy efficient?

Pohang Steelworks is one of the most intricate modern steel manufacturing sites in the world. We continuously look for improvements throughout all processes including in the combustion, gas, corrosion, mechanical, instrument & measurement engineering practices, and statistical analysis techniques. If problems are found they are analyzed to eliminate and prevent faults or delays.

Also, at Pohang Steelworks, each facility has their own characteristics from raw materials to end products. Producing coke, sinter, and pig iron is a near continuous process, but producing steel is a batch process. Respective rolling mills have different rolling schedules and maintenance periods. Upstream processes, such as the blast furnace, have a fixed maintenance schedule. Why is knowing the characteristics of the process important? The processes create by-product gases and if there is a break in the use of the gases, the furnace will need to be flared once the gasholders are full. This has a significant impact on the emissions intensity for the site. Pohang Works uses many kilometers of pipelines and multiple power plants in order to utilize all the by-product gases and my role is to eliminate the flaring ratio and to operate energy facilities with high efficiency. The most important job is to maintain the facilities so that they are in good condition and can operate when needed.

Inside steelmaking plant of POSCO (Image courtesy of World Steel Association)

For sites like POSCO, energy needs to be viewed holistically to be able to create a balanced energy generation system, which helps avoid waste in gas & electricity. There is a project currently underway to build a new integrated energy management system that will help optimize energy use and prevent waste.

More and more automakers around the world are focusing on sustainability and emission reduction. What kinds of benefits can sustainable materials like steel bring to the auto industry? Also, what is POSCO doing to help automakers manufacture more sustainable vehicles?

Steel is better than alternative materials like aluminum and carbon fiber composites for various reasons. Properties of steel vary greatly but it’s always adaptable to making new products for different end products. When the electric arc furnace (EAF) melts steel, it can be formed into a new product without a loss of quality. On the other hand, other alternative materials composed of alloys at a lower temperature remain as molten alloys, and they require additional processing to separate the various elements from the original material, which cannot always be done without a loss of quality. For steel, this is not a problem. Also, because of the sustainable life cycle of steel, automakers can recycle old automobiles into brand new cars without a reduction in quality.

Additionally, by replacing conventional steel materials with advanced high-strength steels (AHSS), drivers can reduce fuel usage by as much as 5% and greenhouse gas emissions by 6%.

POSCO has developed numerous lightweight solutions to enable automakers to produce lighter, more eco-friendly products with no reduction in strength and durability. Using more sustainable materials like POSCO GIGA STEEL can bring numerous benefits to the auto industry as it offers automakers the ability to produce stronger cars with fewer emissions.

For more information on POSCO GIGA STEEL, take a look at the 6 reasons why POSCO GIGA STEEL is Ideal for both automaker and consumers.