Audi-Alcoa all-aluminium vehicle development

"$90,000 Audi, all made out of aluminum" — twenty years of production by 2014.

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.

The luxury-segment proof-of-concept that drove the early-1990s hype cycle.

Back in the early 90s I also had opinions about all-aluminum automobiles. People were predicting that, because of the price of gas, in five years all the cars would be all-aluminum vehicles. Audi was starting to come out with an all-aluminum vehicle. It's the same type of thing. People were talking all this great hype about the increase in the price of gas and how the aluminum vehicle was going to wipe out steel, and the steel mills were all going to fall apart, and no one would invest in the steel industry, they're totally foolish to do so. I used to say, we will not have all-aluminum vehicles for another twenty years. Everybody was just shocked, how could I say this.

Cited as a real but niche product proving the cost barrier — you can buy an all-aluminum Audi, but you can't buy an all-aluminum Ford Taurus at Taurus prices.

Yes, you can buy an all-aluminum Audi. We had all-aluminum Duesenbergs in the 1930s. But you wouldn't buy a Ford Taurus for twenty thousand dollars if it was made out of aluminum. It would be a forty-thousand-dollar Ford Taurus. Professor Clark had students doing doctoral theses on substitution of aluminum, making a Ford Taurus out of aluminum, and concluded it would only cost five hundred more. I said, what about fabricability? She had to go back and rewrite a page in her thesis. And she still didn't get the point. There are reasons why cars and ships and railroads are made out of steel and airplanes are made out of aluminum. We'll go through that in a little bit.

Cited as the 1990s entry point for all-aluminum production vehicles.

You don't think of aluminum as a new material in aircraft — we've been making aluminum aircraft since the 1940s. Actually the engine in the Wright Brothers' aircraft was an aluminum-copper alloy casting. They were using aluminum on the first flight. And certainly by the 1940s many of the military aircraft were mostly made out of aluminum. It was a big deal in the 1990s, only 20 years ago, when Audi came out with all-aluminum vehicles. Was that really a big deal? I could show you pictures of Andrew Mellon, of Carnegie Mellon Bank fame, in the 1930s with his all-aluminum Pierce-Arrow. He could have Pierce-Arrow build him an aluminum Pierce-Arrow because he was the investor for Alcoa. He made a lot of money off the aluminum business.

But they were trying to make a Ford Taurus that would compete with a Toyota Camry made out of steel. I used to give this talk that you'll never see that in the next 25 years. At the time, Alcoa was working very closely with Audi to make the first all-aluminum Audi. The senior Executive Vice President of Alcoa, Peter Bridenbaugh, was a graduate of this department, and at various times I gave talks and he'd get up and talk about how they're building an all-aluminum Audi. Well, anybody can build an all-aluminum car if it costs $90,000. But if you're going to buy a $20–25,000 Ford Taurus, I don't think it's going to be all aluminum, okay. I kept saying that for about five or ten years. Peter and I talked about the price of gas. It gets down to: all-aluminum cars in 1990 made no sense unless you were talking about gas at $4 a gallon. At that time gas was about a buck fifty a gallon. I used to be conservative — I said, well, you're not going to have all-aluminum cars until the gas is $3 a gallon. And Peter came up to me at the end of one conference: no, it's $4 a gallon, okay, because Alcoa knew it. It's the energy cost of the aluminum.

Peter Bridenbaugh anecdote. Tom and Bridenbaugh (then SVP at Alcoa) at a metallurgical conference; Bridenbaugh confirms the break-even point is $4 a pound, not $3. Establishes that the Alcoa-Audi partnership was bounded by aluminum's premium-segment economics.

Yes, that's a big deal. Audis are almost all aluminum. Audi and Alcoa had a big thing back in the '90s. I used to say the break-even point was $3 a pound. I gave my talk at a metallurgical conference, and Peter Bridenbaugh, who was a graduate of this department, at the time was senior executive VP of Alcoa — he had the longest title, research, development, safety, technology, environment, and something else. Peter was giving a talk in the same session. I was talking about how you're not going to make aluminum Tauruses because it's too expensive, and Peter was coming in to give a talk about all-aluminum vehicles and the work they were doing with Audi. He came up to me afterward and said, "It's not $3 a pound, Tom — it's $4 a pound is the transition." He admitted it was even higher than what I had estimated. He used the $4 number. That's a mid-'90s number.

Ten-year development cycle for all-aluminum auto body. Used to make the point that aluminum vehicles are technically feasible but economically marginal at consumer price points.

Any fool can build a hundred-thousand-dollar aluminum car if they want to invest the time and effort. It only took Alcoa and Audi about 10 years to develop all the processes to make an all-aluminum auto body. But people did it in the 1930s, only they didn't do it for a hundred thousand dollars. It was Andrew Mellon of Mellon Bank, and he was on the board of Alcoa, and he had more money than most of the other people in Pittsburgh combined. He wanted an aluminum car, so he didn't care what he paid for it. We know how to join aluminum, but...

Mentioned in passing — Tom's "I wasn't talking about all-aluminum Audis at the time" referencing his 25-year-old forecast of when aluminum vehicles would arrive.

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?

So what does that mean for a Ford Taurus or a Toyota Camry that sells for 25 grand? There's only twenty-five hundred dollars worth of material in that car. However, if you go from steel to aluminum, there's an increase in cost because the aluminum is more expensive, and you might add three hundred dollars worth of material to the cost of that car. What's the big deal of going to an all-aluminum vehicle? Well, it turns out all these other things for the aluminum can increase that cost by five or ten thousand dollars. So it's not just going from a twenty-five-thousand-dollar car to a twenty-five-thousand-five-hundred-dollar car. It's going from a twenty-five-thousand-dollar car to a thirty-thousand-dollar car when you go to an all-aluminum vehicle. Audi 25 years ago came out with all-aluminum structures, but that was for $80,000 vehicles.

Anyone can build a $100,000 aluminum car (Audi); building a $20,000 aluminum car is much harder (still steel-bodied Ford Taurus 25 years later).

I also talked about ceramics, because people would say we're going to use these other materials and steel is a dying material. It's not a dying material. I used to say, "In 20 years we'll still be driving steel cars." People said, "What about the all-aluminum Audi?" If you go buy an Audi, it'll be all aluminum — high performance, lightweight. And what will you pay for it? $100,000. If you buy a Ford Taurus, you'll pay $20,000 or $25,000. In the mid-90s I started saying anyone can build a $100,000 vehicle out of aluminum, but building a $20,000 vehicle out of aluminum is a lot more difficult. That's still true today. Twenty-five years ago I predicted we'd still be driving steel cars in 20 years, and here it is 25 years later and we are. All it took was understanding something about joining technology and the cost of materials.

Brief aside — Audi's high-volume all-aluminum vehicle production hit problems that the historical J.P. Morgan low-volume aluminum cars (1930s, hand-repairable) had not exposed. Used as a learning-curve example.

[Student follow-up.] The problem with the larger boats made of aluminum is cracking, fabrication, fatigue cracking. They don't have the experience. It's not really a problem that they didn't have when they first started building steel ships, but there's a learning curve of how to do the design. The way you design for aluminum is not the same way you design for steel in terms of welded construction and fatigue cracking. Whenever you go to use a new material there's always a learning curve. When Audi went to build all-aluminum [lunar] automobiles, even though they had been built for J.P. Morgan back in the 1930s — he could afford to have his cars repaired — but when they went to high-volume production, they started running into lots of problems they never realized they would have. Then you work your way around and learn to design around those things.