Ferrari and BMW have just made the switch. The two European giants are phasing out copper in their electrical systems in favor of aluminum, which is significantly cheaper. They are joining Tesla and all the Chinese automakers, which made this shift several years ago. A major shift for the automotive industry. 🔄
🔍 What’s going on?
Copper currently costs about $9,300 per metric ton, compared to $2,600 for aluminum. This price gap is becoming unsustainable for automakers, especially amid a price war over electric vehicles.
Ferrari and BMW have confirmed their transition to aluminum for the wiring and electrical harnesses in their new models. Tesla pioneered this move as early as 2019, followed by all the Chinese automakers that now dominate the EV market.
💡 Why does this matter?
This shift is hitting copper hard, as it is automatically losing massive markets in the automotive sector. Each conventional electric vehicle uses about 80 kg of copper. If the industry switches to aluminum on a massive scale, demand for copper could drop by several hundred thousand metric tons per year.
Conversely, aluminum is emerging as the big winner of this transition. Aluminum producers are seeing their structural demand outlook skyrocket, while copper miners will have to revise their growth projections downward.
📊 Our Take
We are witnessing a major shift that will reshape global flows of industrial metals.
Copper has long been driven by the narrative of the energy transition and automotive electrification. But this assumption has just taken a major hit. If even Ferrari—the epitome of luxury—is choosing aluminum for cost reasons, it means the industry consensus has been settled. Western manufacturers are now following the path laid out by Tesla and Chinese companies, which have proven that aluminum is technically viable on a large scale. For copper miners like Glencore and Antofagasta, the pressure is mounting. In Europe, this transition is also impacting TotalEnergies and Bolloré Logistics, major players in the transport of industrial metals.
We expect copper to face structural pressure over the next 12 to 18 months, barring a massive rebound in Chinese demand from the construction sector. For French traders: keep an eye on the copper-to-aluminum ratios on LME contracts, and favor long aluminum exposure if you’re trading industrial metals.
✅ Key Takeaway
- Ferrari and BMW are switching from copper to aluminum for their electrical systems
- Tesla and all Chinese automakers had already made this shift
- Copper is losing massive market opportunities in the electric vehicle sector
- Aluminum is emerging as the big winner of this industrial transition
- The copper-to-aluminum ratio is one to watch closely on LME markets
What do you think? Will aluminum permanently replace copper in the automotive industry, or does this transition hide technical constraints that will resurface later?
🔎 See also
To learn more, check out all our commodities analyses on ActuTrading Commodities 📈
Source: Financial Press, LME data
