Ford F-150 all-aluminum body program

Tom predicts the price increase (one-third over the $30K base) and describes the F-150 as Ford's most profitable vehicle at $10K/unit margin. Frame: high-volume aluminum vehicle, "the first people ever to do it."

Now you can say, well, what about aluminum in automobiles? They've been making all-aluminum Audis for twenty years. They made an all-aluminum Duesenberg in the 1930s, or a Pierce Arrow — there's a picture I have of JP Morgan standing next to his all-aluminum Pierce Arrow. But those were not consumer cars like a Model T. The Ford Taurus is still made out of steel. You can buy a $90,000 Audi, all made out of aluminum. And you're going to soon be able to buy a Ford F-150 that's not all aluminum — not the frame rails, they're still steel — but the body is going to be aluminum. They haven't announced the price. This summer they'll announce it.

Mentioned in passing as driver of aluminum automobile narrative. "We'll get to that in a little bit."

Other questions? Then we'll get back to what we're supposed to be talking about. We had talked about aluminum being canned electricity, and I mentioned last time that China has, in the last six years, increased their aluminum capacity by 250%. The rest of the world's not going up that fast. Some of this is because Ford is now making an F-150 out of aluminum, and people are saying we're going to start making aluminum automobiles, and we'll get to that in a little bit. But I have concluded that China has decided they don't mind being the country that creates all the pollution and essentially is killing their own citizens. They have lots of coal, and the way they're going to export it is by selling aluminum dirt cheap on the world market, which is hurting a lot of the aluminum companies right now.

Student-prompted ("Truck?"). Tom: $40K aluminum vs. $30K steel projected.

Yeah, they're coming out with it now. They're coming out with an all-aluminum truck, but we haven't seen the price yet, and I'll bet you it's a $40,000 truck even though the steel one you can get for $30,000. When I was saying all this twenty-five years ago, I was saying we wouldn't see all-aluminum vehicles for another twenty years. I wasn't talking about all-aluminum Audis at the time. I told you yesterday or the day before, anybody can build a $100,000 vehicle out of aluminum. How do you build a $25,000 vehicle out of aluminum?

First of all, they picked the highest-volume vehicle in the world, so there's a certain economies of scale that dropped the price a little bit. But how they're making it work is they worked for 30 years on joining techniques. The real problem for aluminum is the joining technology. I passed around the thing that had steel rivets — they have steel rivets because not everything on that F-150 is aluminum. They have to join aluminum to steel, and how do you do that without having a serious corrosion problem because of the galvanic action and the salt on the roads? There's 30 years worth of development. I first started seeing it back in the early 90s when I would visit Detroit and see them in the research labs working on joining techniques and corrosion protection, and it wasn't until 20 years later that they came out with an all-aluminum F-150.