Why Companies Choose Aluminium over Copper Amid Surging Prices
Key Factors and Industry Examples of Aluminium Substitution
LONDON, June 30 (Reuters) - The spike in copper prices to a record high earlier this year has added weight to arguments for switching from copper to cheaper and lighter aluminium in a range of sectors.
Here are the factors involved in the decision and some companies that have moved to substitute aluminium for copper.
Why Do Companies Decide to Substitute?
Both metals conduct electricity and heat, and as copper prices rise, aluminium becomes more attractive as a substitute.
Aluminium is about a quarter of the price of copper, but it is not as efficient, with only 61% of the red metal's conductivity. That means aluminium conductors have to be about 1.6 times larger.
Companies look at swapping the two metals in a range of applications when the copper-to-aluminium price ratio moves to between 3.5 to 4.0 or above, industry sources say. It hit a record of 4.3 in January and is currently at about 4.2.
Companies face costs in retooling operations, so they only make the switch after considered analysis.
Copper is about 3.3 times heavier than aluminium, making the latter desirable for autos and especially EVs, where cutting weight results in longer driving ranges.
Industry Applications of Aluminium Substitution
Autos
Ferrari
The Italian sports car maker, which has already used aluminium for engines and chassis, started using aluminium wiring on its 296 model last year.
Together with reducing cross-sections of cables, this has resulted in saving 15% to 20% of total wiring weight, the company told Reuters.
BMW
Germany's BMW told Reuters it first used aluminium conductors in 2011 in its subcompact 1 Series, and progressively expanded the substitution for copper electrical components in hybrids and BEVs.
Since last year's launch of 6th generation eDrive technology, BMW is now using a large number of aluminium cables in both high and low-voltage systems, it added.
Stellantis
The world's fourth largest automaker by car sales is swapping the two metals for wiring, an industry source told Reuters. The company declined to comment.
Tesla
The automaker has been a pioneer in using aluminium in its EVs, spearheading the use of giant aluminium casting machines to build simpler chassis parts even before it started using the metal for wiring in its Model Y in 2019 and more recently in its Cybertruck.
AVATR, XPeng, Xiaomi
These firms are some of the Chinese EV makers using aluminium electrical wiring in new models instead of copper to save money and cut weight, according to U.S. consultancy Caresoft, which tears down cars and examines components. The three companies did not respond to requests for comment.
TOYOTA
The top global car maker said it is always evaluating various materials and may adopt aluminium as a substitute for copper depending on the application, but declined to provide further details.
VW
The world's second biggest automaker said it has no concrete plans to broadly replace copper with aluminium for wiring, but aluminium is used in certain applications where it offers specific benefits.
Electrical Wire
Nexans
While a large amount of substitution has already occurred in the cable sector, further global investment in electrical grids of about €10 trillion is expected by 2030, according to French-based Nexans, the world's second biggest cable manufacturer.
The company sees strong growth for both metals, with copper remaining the benchmark material for demanding applications, while aluminium is expected to capture a growing share of grid investment due to its cost advantage and greater availability.
Prysmian
The Italian-based electrical cable maker, the world's biggest, has seen gradual substitution by its customers and currently uses about 40% aluminium by weight, up 3 percentage points over the last five years, and 60% copper. "Grid resilience and data centres are projecting strong growth in both categories," the company told Reuters.
Energex
Queensland’s state-owned electricity distributor Energy Queensland has been replacing copper with aluminium for many years over its distribution network of 210,000 km when aging assets reached the end of their life, spokesperson Emma Oliveri said.
"Aluminium is more cost-effective, equally as durable, lighter and can span further when stringing power lines."
Heating and Air Conditioning
Daikin Industries
Japan's Daikin, the world's largest air conditioning manufacturer, said in its 2025 annual report it was "maximizing cost reductions by switching from copper to aluminium", but it declined to provide further details.
Lennox International
The U.S. company developed technology to replace copper coils with aluminium in air conditioners, heat pumps and evaporator coils, reducing the chance of corrosion and cutting the weight of models by up to 50 lbs, it said on its website.
Carrier Global
Since 2023, the U.S. company has moved to aluminium coil technology for all its coastal air conditioning and heat pump models to improve corrosion resistance, its website said.
(Reporting by Eric Onstad; additional reporting by Daniel Leussink in Tokyo; Editing by Veronica Brown and Claudia Parsons)
