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.

Smart factories are bringing AI, IoT and Big Data to the manufacturing industry.

#1 How Smart Factories are Changing the Manufacturing Industry

The Fourth Industrial Revolution is bringing AI, IoT and other automated technologies into people’s lives and changing the way they live and interact with one another. It is also bringing about change in the manufacturing industry as more companies embrace smart factories to further enhance efficiency, performance and safety. Take a deeper look at how smart factories are reinventing the manufacturing industry.

SEE ALSO: How Factories Produce Steel- the Smart Way

POSCO GIGA STEEL also offers electric vehicle manufacturers a lightweight material solution.

#2 POSCO GIGA STEEL Increases Strength, Improves Safety in Autos

This year, POSCO GIGA STEEL set a new, industry standard for strength and formability for auto steel. The advanced high-strength steel (AHSS) is an automaker’s dream come true as it falls into the strongest category of steel commercially available today. Plus, its lightweight property makes it the perfect solution for manufacturers trying to design safe, high-performing and sustainable vehicles.

SEE ALSO: Ask an Expert: Has Steel Achieved Its Peak in Lightweighting?

Lithium-ion batteries are found in some of the most popular devices available today. (Source: BGR)

#3 POSCO’s Innovation Shapes the Ever-Growing Lithium Market

POSCO is the world’s 5th largest steel producer, but it’s got more up its sleeves than just steel. This year, POSCO developed game-changing technology that extracts lithium from water in just 8 hours to one month. Traditionally the task takes anywhere from 12 to 18 months. To add, the new technology can achieve a purity rate of 99.9 percent and increases the lithium recovery rate to over 80 percent.

Lithium is a central component in rechargeable batteries for electronics such as smartphones, laptops and most importantly, electric vehicles (EVs). Heading into 2018, POSCO is well-positioned to be an industry leader in a rapidly-growing market for EV batteries.

SEE ALSO: The Fuel of Tomorrow: Mining Lithium for Tomorrow’s Cars

POSCO CEO Kwon Ohjoon fires up Pohang Blast Furnace No.3

#4 POSCO Gets “Smart” with Pohang Blast Furnace No.3

In June, one of POSCO’s oldest and the world’s 5th largest blast furnace got a makeover with some added AI. After undergoing 102 days of repairs, Pohang Blast Furnace No.3 came back much bigger with an expanded furnace volume of 5600㎥, compared to its original volume of 3795㎥ from its beginnings in 1978. Plus, Pohang Blast Furnace No.3 now has smart sensors to monitor operations and detect malfunctions or accidents before they happen.

SEE ALSO: How to Make Steel with an Old(ie but Goodie) Blast Furnace

Ajay Telrandhe in Quality Assurance and Manish Kochar & Chetan Waghchoure in Sales talk to the Steel Wire.

#5 Ask an Expert: POSCO Leads India’s Growing Automotive Steel Market

POSCO Maharashtra is POSCO’s leading subsidiary. Three of their employees gave the Steel Wire an insider’s look into the company’s success, despite a challenging market environment and government restrictions. The team in India implemented positive changes in the company’s steel quality, production processes and customer service to become a leading solution-provider for their automotive partners.

SEE ALSO: Revving Up for Growth: India’s Automotive Market is In Full Gear

EVs, autonomous vehicles and shared mobility will drastically change the auto industry. (Source: Electrek)

#6 Ask an Expert: Electric Vehicles and the Future of the Automotive Market

Stephen Zoepf, executive director at the Center for Automotive Research at Stanford University, was the first speaker at POSCO’s 2017 Global EV Materials Forum. Zoepf shared his vision of what the future automotive market will look like and its implications for car manufacturers, suppliers and drivers. According to research, 60 percent of the cars in the U.S. will be running on electric batteries by 2030, and those cars will mostly be part of a shared mobility service. Traditional ways of car production, distribution and consumption will undergo massive change and companies will have to find ways to stay competitive in the new market dynamics.

SEE ALSO: The Forgotten Fleet: Looking Back on Early Electric Vehicles for a Better Future

Steel dresses from Naim Josefi’s 2017 F/W GANGS collection. (Source: Naim Josefi)

#7 Ask an Expert: Fashion Forward with Steel

Fashion designer Naim Josefi opened new possibilities for steel application with his 2017 F/W GANGS collection which included dresses made of elaborate steel sequins and laser-printed jeans. He is also known for his 3D-printed high heels that provide the perfect fit. The artist has a passion for fusing technology into his work and finding more sustainable ways to create beautiful clothes and says he will continue to use steel as a high-tech, fashion material.

Heading into a new year in 2018, the Steel Wire promises to be the best source of steel industry news and continue to provide exclusive, insightful and interesting stories.

So, what happened to the EVs of the past, and how can the world prevent them from going the way of the dodo bird for yet a second time in history?

The Golden Age of Electric Vehicles

The first EV hybrid car was made in 1901 by Ferdinand Porsche, and by 1917, 38 percent of the cars on US roads were EVs, 40 percent were steam-powered cars and the remaining 22 percent were gasoline-fueled.

Porsche recreated the Semper Vivus, the first hybrid EV made by Ferdinand Porsche. (Source: Super Street)

At the time, horse-drawn carriages were the norm, and people were desperate to solve the “pollution problem,” meaning pollution in the form of horse droppings. Even then, EVs were seen as the solution for a clean environment, and from 1895 to 1920, 50 companies were producing EVs. However, gasoline-powered vehicles were also a viable option and increased in number along with EVs as more highways were built and people and goods started to travel greater distances.

A woman cranks her car on the streets of New York in 1923. (Source: Pinterest)

EVs had an initial advantage over gasoline cars for several reasons. They were more environmentally friendly, or the exhaust didn’t give off an awful smell, were less noisy and easier to drive. The shortcomings of gasoline cars also played a factor. Gasoline cars had to be started manually, or “cranked,” every time, making them laborsome and even dangerous to drive. Although they had better range, gasoline cars also broke down more often. The tables quickly turned.

SEE ALSO: Why Electrical Steel Can Make All The Difference In EV Motors

The Rise of Gasoline and Ford

The company that led the rise and dominance of gasoline cars was Ford and its Model T vehicles that sold for USD 650 versus EVs that sold for around USD 3000. When Ford mastered mass production with assembly lines, the company turned out 1,670,000 vehicles in 1923.

Ford’s Model T sold in the 1920s pioneered the normalization of gasoline cars.(Source: Think Link)

Another key turning point for gasoline cars was when Charles Kettering invented the electric ignition in 1915. Drivers no longer had to start their cars manually, one of the reasons gasoline cars were not popular, especially among women.

As more highways were built, there was a demand for greater range that EVs just could not meet, especially when gas stations were cheaper to build than charging stations. Plus, there was no standardized plug for different EV models. Later on, when gasoline cars came equipped with exhaust-control devices that reduced the amount of harmful emissions, people were sold and EVs could no longer compete. EVs made a short resurgence back in the 1970s due to the global oil crisis, but by the 1980s, EVs were almost obsolete.

Back to the Future

Today, it seems as if history is repeating itself. There is a sense of urgency worldwide to tackle the pollution problem – except this time it’s not horse droppings.

In ten years between 2005 and 2015, the number of EVs went from hundreds to a million. Then, in 2016, there was a 60 percent increase in the global number of EVs, and the numbers are projected to grow exponentially. Many countries are backing the switch to electric fuel through tighter regulations on emissions and even completely banning gasoline and/or diesel cars.

Many countries around the world are now banning gasoline and diesel-fueled cars. (Source: Quartz)

Despite the rapid growth, EVs still make up just 1 percent of the global fleet of cars. According to the International Energy Agency (IEA), there need to be 150 million EVs by 2030 and 1 billion by 2050 to contain global warming within 2 degrees Celsius.

For widespread EV adoption, manufacturers, suppliers and policymakers alike can pick up some hints from the past.

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

Takeaways

EV manufacturers of the past and present have not found a cure for drivers’ range anxiety. It’s a scenario that likely crosses the mind of any driver considering an EV; running out of juice with no charging station in sight.

A study by MIT shows that range anxiety is irrational because most people drive just 45 miles a day, well under the range of today’s EVs.

The range of today’s EVs. (Source: Vox)

A well-organized charging infrastructure is vital not only for drivers with range anxiety, but also for car companies and those in the charging business. Charging equipment is costly and stakeholders need to know there will be enough demand to make a return on their investment, but drivers are more likely to make the switch after a charging ecosystem matures. The dilemma calls for a collaborative effort among automakers, policymakers and companies like POSCO.

POSCO ICT’s ChargEV

POSCO ICT is an IT and engineering company looking to relieve range anxiety and take a holistic approach to establishing a charging infrastructure in Korea for a greener future. In partnership with various automakers, businesses and the government, POSCO ICT set up more than 300 charging stations in Korea and oversees many more private charging stations within its network.

There are over 300 POSCO ICT ChargEV stations in Korea. (Source: POSCO ICT)

The charging ecosystem is run through an app called ChargEV where drivers can sign up to get real-time information about charging locations, make reservations and even pay for charges. ChargEV is also a platform for customer support and reporting accidents. In addition, partner companies such as shopping centers and hotels that are now equipped with charging stations stand to benefit from the EV network.

EVs are, once again, a major disruptive factor in the automotive market and the future of private transportation. This time around, the stakes are much higher than pungent streets. As more countries and companies commit to reducing harmful emissions, the number of EVs will likely continue to spike. However, if stakeholders can learn a thing or two from the past, it’s that establishing a holistic charging ecosystem will have as much of an impact on EV adoption as the technological advancements of the vehicles themselves.

Cover photo courtesy of SCMP

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.

Although wire rods are not always in the spotlight, they are widely used in many parts of a car. Steel wire rods are processed into parts for the steering and suspension systems, tire cords and bearings.

However, not all wire rods are the same, and improvements in production technologies can increase automotive performance, safety and cost-effectiveness. POSCO’s world premium steel wire rods provide such solutions to its automotive partners as the global demand for automotive wire rods continues to grow.

Take a look at the video below to see why more and more automakers are choosing POSCO’s wire rods, and where they can be applied.

Wire Rods in the Steering System

The steering system is what allows the wheels of a heavy vehicle to move in various directions and angles, with little force exerted by the driver. If the driver were to steer the road wheel directly, he/she would have to apply 16 times more effort. Fortunately, the movement of the steering wheel passes through the steering system of pivoted joints to the road wheels, which minimizes the burden of labor on the driver. The most common type of steering system is the rack and pinion, pictured below.

Wire rods make up the steering system of a car. (Source: Tires and Parts)

Traditionally, wire rods used for the pinion shaft, rack bar, ball housing, tie rod and tie rod end of the steering system have to be heat treated twice during production. POSCO developed a way to take out all the heat treatment from the production process, allowing manufacturers to cut costs significantly and reduce unwanted emissions.  

Wire Rods for Springs

Automotive springs are part of the suspension system of a vehicle, which determines the level of control the driver will have, as well as the level of comfort. The spring coils compress and elongate along with the movement of the wheels to absorb shock and keep the car body level.

Coil springs are part of the suspension system of a car. (Source: Pakwheels)

As such, the wire rods that make up the suspension system have to have high tensile strength and fatigue resistance. POSCO’s wire rods for automotive springs are made of ultra-clean alloying steel and have a 2.3 GPa tensile strength versus the average 1.9 GPa of traditional wire rods. When applied to the engine valve springs and coil springs for suspensions and stabilizer bars, it enhances the overall performance, safety and lightweight features of the vehicle.       

Wire Rods for Tire Cords

Wire cords undergo an extensive drawing process to be processed into tire cords, also known as tire belts. Tire cords are important because they act as the chassis of the tire, giving it strength and resistance against punctures. It also allows the tire to stay flat for maximum contact with the road.

POSCO’s wire rods during the production process. (Source: World Steel Association)

The quality of tire cords lies in its strength, elongation and stiffness, and require especially clean and high-strength steel to produce. POSCO’s wire rods for tire cords are also highly workable for producing extra-fine wire, meaning car manufacturers get the added benefit of lightweight along with enhanced safety and performance.

Wire Rods for Wheel Bearings

Wheel bearings are under a lot of pressure, literally. It bears the weight of the vehicle so that the wheels can turn as smoothly as possible with little friction. If a car’s wheel bearings don’t function properly or wear out, the tires can rub against the axle, the rubber can burn due to friction, the wheels can malfunction and cause screeching sounds. It is important for the bearings to be highly wear and fatigue resistant to minimize work hardening, crack and deformation. POSCO’s innovative production technology includes numerous tests and quality checks to ensure that wire rods for bearings are in perfect condition.

Wheel bearings bear the weight of the vehicle so tires don’t have to. (Source: MOOG Suspension Parts)

Recently, Research and Markets predicted a compound annual growth rate (CAGR) of 3.50 percent for the global stainless steel wire rod market from 2017 to 2021. This is a telling sign that automakers will continue to seek high-quality wire rods in the midst of growing investment in electric and autonomous vehicles. Now with its second overseas facility up and running, POSCO will continue to meet the global demand for world premium automotive materials and provide innovative solutions to its partners.  

Cover photo courtesy of Steel Intelligence.

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Contrary to popular belief, mass reduction does not automatically equal fuel savings, especially when it comes to urban driving. There are other factors that determine the fuel efficiency of a vehicle such as driving cycle, vehicle size and its powertrain. Until recently, there was a  lack of variety in engine types and powertrains, so even though automakers reduced the weight of car frames, they could not apply a complementary engine or powertrain to the lighter parts.

So, have automakers been lightweighting for nothing?

Of course not, in the past decade alone, engines and powertrains have also become extremely efficient through advancements in start-stop-systems and downsizing, and newer options including hybrids, electric batteries and range extenders that now allow automakers to capitalize on their lightweight materials.

Although there are several lightweight materials, below are 5 reasons why AHSS continues to be the lightweight material of choice for automakers:

1. Decision Makers Care About the Environment

Well, not everyone, but many countries around the world have started the process to phase out gasoline and diesel-fueled cars, including India and China, the two largest automotive markets in the world. Governments are taking serious action against climate change and it will reflect in their policies. Automakers are choosing to lightweight their vehicles for lower emission rates with AHSS, because not only is AHSS lightweight, there are no trade-offs with other vital features such as safety and cost-effectiveness.

2. Everyone’s Going Electric

Globally, automakers are investing in electric vehicles (EVs) in line with national and international environmental policies. However, EVs still have a ways to go before they become the norm. EVs will face the same safety requirements as regular cars, but with the added responsibility of protecting the battery and its flammable components during a crash.

In 2016 there were several car accidents involving the Tesla Model S, where leaked battery fluids caused fires. Automakers need to find a solution to make EVs as safe, and eventually, safer than traditional cars. As an innovative automotive material, AHSS was built for safety.

3. Safety is Always First

Safety is and should always be the number one priority for automakers, material providers and policymakers alike. Even with all the hype about autonomous driving and sensors, there is very little chance that policymakers will reverse the stringent safety regulations in place today. People want to feel safe, no matter what type of car they are getting into.  

2016 Smart Fortwo and the Mercedes S Class take part in a crash test (Source: Green Car Reports)

One possible material solution is Complex Phase (CP) steel, a type of POSCO GIGA STEEL for the vehicle’s side panels, bumper rails and door impact bars- the parts that determine the safety ratings of the vehicle. It has superior strength and shock-absorbing qualities, without the added weight of traditional high-strength materials, and that’s why carmakers such as GM Korea, Ssangyong Motors and Renault Samsung Motors all use POSCO GIGA STEEL.

4. Cost is Always Second

This goes for automakers as well as drivers on the consuming end. Drivers want lower costs without compromising safety and performance ratings, and desire fuel efficiency- a major reason why automakers are lightweighting.

Some automakers choose alternative materials such as aluminum and carbon fiber to meet lightweight requirements to find that not only are the materials more costly over steel, factories need an equipment overhaul to work with them. Moreover, there are additional costs related to training employees to work with new materials, whereas all auto manufacturers are familiar with welding and forming steel.  

Take a look at this infographic and see how AHSS stacks up against other lightweight materials in terms of cost and performance.  

5. It’s Not Over Till It’s Over

No two lightweight materials are the same when observed under the life-cycle approach, a comprehensive life cycle assessment of a material’s automotive carbon emissions from production to disposal. Often times, the process of manufacturing lightweight materials and improved powertrains result in more carbon emissions than they are saving.

The life cycle assessment can be used to determine the carbon output of a vehicle. (Source: World Auto Steel)

At the end of the day, steel has the lowest production-related emissions and can be recycled at the end of its lifecycle. Steel remains the most recycled material because it can be reapplied in different forms almost infinitely.

Automakers are increasingly incorporating lightweight materials to their new models. Although competition for the greatest market share of lightweight materials is fierce, AHSS is by far the leading material when it comes to lightweight solutions. According to McKinsey & Company’s Lightweight, Heavy Impact report, the percentage of high-strength materials used for cars will increase to 38 percent by 2030, compared to 15 percent in 2010. Steel continues to evolve according to the changing demands of the auto market, and for now, there is no other multi-solution material that can compete.

Cover photo courtesy of Hyundai.

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CIAPE is the largest automotive parts expo in China, and has been sponsored by China’s Ministry of Commerce since 2008. As many as 200,000 people participate in the event, including over 2100 companies around the world to exhibit various automotive products. On display this year were various electric vehicles, components, electronics and automotive parts and manufacturing facilities.

POSCO actively promoted POSCO GIGA STEEL at its exhibition booth where visitors browsed various automotive parts made of GIGA STEEL. Visitors were especially impressed with POSCO GIGA STEEL’s lightweight, cost-efficient and high-performance qualities, as well as POSCO’s production technologies.

Throughout the expo, POSCO introduced practical applications of its products including wire rods for automobiles, electrical steel sheets, stainless steel for various uses as well. Various automakers and parts makers could also experience POSCO’s steel mills and production processes through VR technology.

A total of 1,583 people visited POSCO’s booth over the 3-day period to browse the electrical sheets, wire rods and stainless steel products as well as automotive steel plates. In particular, as many as 1,020 people flocked to the GIGA STEEL Experience Zone where they could compare the hardness, weight and thickness of aluminum and GIGA STEEL.

POSCO also held 71 meetings with 188 potential customers from various sectors, including automakers and parts makers in China and promoted its GIGA STEEL and automotive World Premium Products (WPP) to potential business partners.

One of the visitors was Lee Jeong-hae, CEO of Sungwoo Hitech Yancheng. He said, “I was able to learn that GIGA STEEL is more effective in reducing weight than aluminum. I am truly looking forward to seeing more automakers use GIGA STEEL instead of aluminum.”

This was the first time POSCO attended the event, and hopes to use it to create momentum for increasing the sales of its World Premium steel products and automotive materials, and to expand its network of partners in China.

Cover photo courtesy of CME Shanghai.

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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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POSCO GIGA STEEL was developed to provide automakers with a high strength, lightweight material solution that also produces significantly less production emissions and is completely recyclable. Take a look at our infographic to find out more about POSCO GIGA STEEL and the benefits it offers for automakers looking for lightweight, sustainable steel solutions.  

In this contribution article, Dr. Roland Geyer, associate professor at the Bren School of Environmental Science and Management at the University of California at Santa Barbara, explores why we need to move beyond fuel efficiency as the sole determinant in measuring a car’s sustainability. Dr. Geyer argues that we need to look at the full life cycle of a car – from production to disposal.

Policies with the goal of reducing climate change impacts from cars focus on reducing tailpipe emissions. While automakers can respond by improving fuel economy with lightweight materials, this can lead to an increase in carbon emissions over the life of a vehicle. Taking a lifecycle approach to automotive environmental policy—from production to disposal—helps avoid such unintended consequences.

Tailpipe Mitigation is Not Enough

Most climate impacts from internal combustion vehicles come from tailpipe carbon dioxide (CO2) emissions. The other life cycle stages, which include vehicle production, fuel production, and vehicle disposal, have much lower greenhouse gas (GHG) emissions. Understandably, therefore legislators focus on curbing tailpipe CO2 emissions and increasing fuel economy. However, automotive climate policy with an exclusive focus on tailpipe emissions opens the door to unintended consequences. This is equally true for vehicles that use biofuels, electric power trains, or lightweight materials to increase fuel economy.

As use phase emissions are minimized, Production phase share of emissions in the total life cycle increases significantly.

Critics of biofuels contend that they can cause, directly or indirectly, more GHG emissions than they avoid. Skeptics of electromobility argue that the GHG emissions of producing electric vehicles—and the electricity to drive them—can outweigh their lack of tailpipe emissions. The production of lightweight materials is typically GHG-intensive, so their widespread use would significantly increase the climate change impact of vehicle production. Good environmental policy aimed at reducing climate impact from vehicles, therefore, needs to consider these “upstream emissions,” which could severely compromise or even negate their climate change mitigation goals.

Without LCA, some lightweighting strategies can lead to a net increase in total life cycle emissions—an unintended consequence.

The Unintended Consequences of Vehicle Lightweighting

Vehicle lightweighting, in particular, poses a threat to effective automotive climate policy. Lightweighting can increase total climate impact and defeat the purpose of the policy since the increase in emissions from vehicle production can be larger than the emissions saved due to improved fuel economy. The trend of increasing drive-train efficiency and decreasing carbon intensity of fuels and electricity will further reduce any benefits gained from decreasing the weight of the vehicle. The importance of addressing the unintended consequences of tailpipe-only regulation, therefore, will only grow in the future.

Therefore the 2014 revision to the EU’s regulation on CO2 emissions from new passenger cars states that “policy action should […] ensure that those upstream emissions do not erode the benefits related to the improved operational energy use of vehicles.”

Life Cycle Assessment Helps Avoid Unintended Consequences

The only way to avoid unintended consequences is to use life cycle thinking and life cycle assessment (LCA). LCA is a mature environmental assessment tool with global standards and close to 50 years of development and practice. It provides a rigorous methodology to account for all emissions generated during the life of a product, making it the ideal tool to identify and quantify environmental trade-offs.

Today LCA is widely used by academia, industry, government, and non-governmental organizations. Together with academia, companies and industry associations are leading the way in the deployment of LCA. Most car manufacturers are already using life cycle thinking and LCA, which is equally accepted by material producers.  

Environmental agencies around the world support LCA, including those of the European Commission, which call it the “the best framework for assessing the potential environmental impacts of products currently available.” Life-cycle-based environmental regulation is in its infancy and not without challenges. Nevertheless, environmental regulators and policymakers have begun to draft legislation with a life cycle perspective, such as California’s Low Carbon Fuel Standard. The regulation of automotive GHG emissions provides a unique opportunity to align regulatory practice with the state of the art in environmental product policy and launch a new area of successful environmental legislation free of major unintended consequences.