Chinese electric vehicle manufacturers could become a strong competitor to the market that Norwegian aluminum giant Hydro is creating.
Distinguished architects in the United States want recycled aluminum. German electric car manufacturers want the silver-colored metal with the smallest possible road surface area.
Hydro has so far entered into agreements with electric vehicle makers Polestar, Mercedes, Volvo and Porsche.
Economists at Hydro have estimated that the company would earn an additional NOK 2 billion per year by supplying aluminum with a smaller footprint.
– Every quarter, I receive as many questions about what we are doing in terms of sustainability as we are doing to ensure profitability, says Hilde Meret Aasheim, CEO of Hydro, to E24.
At the same time, it expects stiff competition from Chinese players.
It could threaten the market
Today, more than half of the world's aluminum comes from China. Most processing is done using coal, which is the most emitting type of energy.
This is about to change. Last year, China produced as much renewable energy as the rest of the world as a whole, according to the International Energy Agency (International Energy Agency). The country invests heavily in solar and wind energy, among others.
China is exporting more and more cars to Europe.
– We should not underestimate the Chinese in the transformation that is taking place now in changing their energy sources. But it will take time, Hilda Mereti Asheim, CEO of Hydro, tells E24.
Aashim had previously warned in the newspaper Financial Times That Chinese cars could threaten the aluminum market in Europe.
Last year, Chinese automobile exports increased by as much as 64 percent. This is well received by electric vehicle manufacturers, which market themselves in Europe, Southeast Asia and Australia, according to Business Insider. AP news agency.
Government support has led to China now becoming the market leader for electric vehicles.
-Do you fear competition from China?
-We are keen to position ourselves with what we produce where we belong, primarily in Europe and the USA.
Customers make more stringent demands
Hydro's boss says car manufacturers are particularly concerned that the company has its entire value chain under supervision. Reducing climate emissions in Norway is no longer enough. The entire value chain must be taken into account.
Here, Hydro's manager believes that the company has a clear advantage.
Like few other companies, Hydro manages the entire value chain itself – from bauxite mines in Brazil to refining the metal in Norway.
Five years after the Hydro scandal in Brazil: – It is as if we do not exist
-We can go to market with complete transparency and document the process in the entire value chain from raw materials in Brazil to the delivery of finished files. This is very good.
Among other things, Porsche says it will sell zero-emission cars in 2030. Mercedes has set itself the same goal, but nine years later.
Driving an electric car is not enough. It's best if the car is emissions-free, Asheim says.
Partnerships and supply agreements have been concluded with Polestar, Mercedes, Volvo and Porsche. Last year, Hydro also became a member of the First Mover Alliance, a US-led initiative where major industrial companies step in to create a market for more climate-friendly products.