CHAPTER 8

CAFE Standards and Materials Competition

Regulation around the world is pushing the industry toward the twin goals of enhanced safety and lower CO₂ emissions (or equivalently, better fuel economy). It takes less energy to propel a lighter vehicle; using lower-weight materials—while preserving strength—is central to achieving those goals. The result is a materials competition between steel, aluminum, plastics, and more exotic materials such as carbon fiber composites. The 2014 Honda MDX improved on its predecessor in fuel economy, and was the first crossover to obtain a five-star rating on the small overlap crash test. A later section will detail that, but for now it suffices to note that its body uses 59 percent high-strength steel, 36 percent mild steel, 2 percent Mg, and 3 percent Al.

Here, we note the regulatory framework, and put the benefits of using lighter materials in the context of the contribution to vehicle efficiency, and to lifetime energy consumption. We then provide greater detail on the impact materials can have on the wider structure of the industry, returning to the advent of the all-steel body mentioned in Chapter 2. We then note a range of other general issues before turning to an extended case study of Honda’s use of new materials in the MDX. Chapter 9 then examines this issue from the perspective of suppliers.

Regulation

All major vehicle markets regulate fuel efficiency, from a concern over energy independence to the impact of vehicle use on global warming. In NAFTA, the key player is the National Highway Traffic and Safety Administration (NHTSA), operating under the Energy Policy and Conservation Act, as amended by the 2007 Energy Independence and Security Act. Their approach is to mandate a minimum standard for Corporate Average Fuel Economy (CAFE), currently calculated for each vehicle on the basis of its footprint. The current CAFE regime is reflected in Figure 8.1, and that for the rest of the world in Figure 8.2. As with comparable regulatory agencies in Europe, Japan, and China, these are fixed a decade in advance, to provide vehicle manufacturers time to re-engineer their vehicles. The CAFE standard for model years 2012 to 2016 will tighten for 2017 to 2021 and again for model years 2022 to 2025, following a “mid-term review” to be completed in 2018. Of course with OEMs now designing “world cars”, they need to take into account the varying standards including the specifics of how compliance is measured, when they map out the fundamental design parameters of a new vehicle.

Complications

CAFE and comparable regulations focus on energy efficiency when a vehicle is driven but ignores the life cycle impact of products. For a vehicle this has three phases, initial production, operation (fuel efficiency and distance driven), and end-of-life disposal (recycling). If the goal is total emissions reduction, then it is necessary to consider the entire life cycle of a vehicle.¹

Figure 8.1 The Evolution of Fuel Economy Standards in the U.S.

Source: 2016 Steel Industry Technology Roadmap for Automotive. Steel Market Development Institute. www.autosteel.org

Figure 8.2 The Evolution of Global Fuel Efficiency Standards

Source: 2016 Steel Industry Technology Roadmap for Automotive. Steel Market Development Institute. www.autosteel.org.

Note: This graph recalculates the U.S. miles per gallon goal into grams of CO₂ per kilometer, assuming a stable composition of the share of different sized vehicles, such as light trucks and cars.

The production phase accounts for up to about 30 percent of total greenhouse gas (GHG) emissions for internal combustion engine and hybrid electric vehicles, and as much as 47 percent for battery electric vehicles (BEVs). As automotive fleet fuel economy increases and as the share of alternate power train vehicles, such as BEVs, also increases, production emissions will become a greater proportion of the total emissions.

The same issue shows up in materials choices, which will become more important as the use of new materials grows. Producing a primary aluminum ingot in North America currently generates at least four times the emissions of producing steel, at 1.9 ton CO₂-equivalent GHG emissions per ton for steel versus 8.94 ton CO₂-equivalent emissions per ton of aluminum. Production of the other lightweighting materials (magnesium and carbon fiber composites) can generate 20 times the emissions of steel. These losses are partially offset by end-of-life recycling— currently about 80 percent of a “totaled” car is either salvaged for parts or recycled as scrap, including most of the steel, copper, and aluminum content. Likewise, recycled plastic can be used for portions of headliners, instrument panels and even carpeting, though the overall impact is modest. More exotic materials may be harder to extract from a vehicle, or may not be recyclable.

Finally, weight is not everything. Vehicle mass is responsible for only about 11 percent of the energy usage in driving a typical sedan. It is helpful to think of a radiator as a symptom of gross inefficiency. In an internal combustion engine vehicle 37 percent of energy shows up as waste heat, from losses in combustion, engine friction and from pumping water, oil and hydraulic fluid. This is followed by 18 percent stemming from friction in the transmission and final drive components. Another 17 percent is used to overcome aerodynamic drag and 12 percent for tire rolling resistance. This mix is shifting. The industry is substituting electric motors for belt-driven pumps, and to handle peak engine loads. Together with infotainment and other electrically powered content, the proportion due to mass and rolling is rising, and is dominant in a fully electric car. Manufacturers work to improve all these elements as they strive to meet efficiency goals, but the focus in the remainder of this chapter is lightweighting.

The First Materials Battle: The All-Steel Auto Body

Materials competition can have profound implications for the system of production. The great historical example is the emergence of the all-steel auto body in the 1920s as a foundation of mass production. Here we extend the discussion found in Chapter 2. The all-steel auto body emerged a feature of product design but also impacted key process technologies including steel stamping, welding, and above all painting. These in turn became the defining factor for economies of scale in the industry.

Until the early 1920s, cars had wood or wood–steel composite bodies. They remained horseless carriages, a wooden frame with steel sheets tacked on. Body construction was slow and costly. In the first decade of the century, it was estimated that it took 106 days to produce a sedan body from the lumber pile to finished product. Within the overall production process, painting had become the bottleneck. Twenty-four operations were required to apply paint and varnish, involving 14 drying periods, each taking from 6 hours to a full day. There were literally acres of storage space at auto plants covered with automobile bodies in various stages of completion. Even though lacquers were eventually developed that reduced drying time from 30 days to 3 days, this was still not enough to keep up with demand. This challenge was one reason that when General Motors ran into financial difficulties in 1920, the DuPont family emerged as the dominant shareholder.

Through a series of overlapping innovations in pressing, welding, and design concepts, Budd redefined a car as a three-dimensional “jigsaw” of sheet steel panels and supports. The entire body could now be baked in an oven. Alongside eliminating the paint bottleneck, the all-steel body gave additional benefits of strength, stiffness, greater design freedom, and dimensional precision. It was much better suited to continuous manufacturing techniques than wood. It raised the fixed costs needed to produce a competitive vehicle, while providing a significant fall in unit costs for firms that could sell enough vehicles to engage in high-volume production. Finally, consumers could choose cars in any color, and benefited from enclosed bodies that were safer and did a better job of keeping out the weather.

Materials and Systems of Production

Budd’s innovations proved amenable to successive rounds of automation. Car companies themselves came to focus on the integration of stamping, welding, and painting followed by final assembly. They also made their own engines and, with greater variation, their own transmissions. While Ford and General Motors remained outliers into the 1980s, over time the modern mass production car plant outsourced components and even subassemblies. Budd’s system thus still determines the capital requirements and production flow of a modern auto plant in its five core processes:

• Press shop—where the sheet steel is pressed into panels;
• Body shop or Body-in-white—where these panels and structural components are welded together to form the unibody;
• Paint shop—where these steel bodies are in stages cleaned, primed, and painted;
• Preassembly—where wiring and other mechanical and electrical components are fit to the body, which often includes fitting the powertrain (engine and transmission);
• Trim or final assembly—the insertion of headliners, carpet, the instrument panel, seats and interior and exterior trim, the connection of wires and hoses, the addition of wheels and windows, and associated quality tests.

This structure remains the framework of the industry. The assembly process for electric vehicles is similar, except that the drivetrain and control electronics may be entirely outsourced. New safety requirements are met by additional components, such as seatbelts and rear camera systems, and through changing the design of the unibody, improving crush zones front and back (which make it harder to create a distinctive design). Likewise new materials must fit into this flow, including developing appropriate joining methods in the body shop, and maintaining robustness in the painting process.

The New Materials Competition

The Ford-150 aluminum pickup truck, introduced at the Detroit Auto Show in January 2014, exemplifies the new materials competition. The transition was made easier because the F-150 is a body-on-frame and not a unibody architecture. But the point was made that even in a vehicle that needs to survive years of abuse, new materials provide the potential for significant weight saving.

From an innovation perspective, lightweighting amounts to a qualitative challenge to the industry: car companies cannot comply with the new fuel efficiency standards from incremental improvements to existing technologies and production methods. The outcome of the new materials competition will not be the triumph of only one side in the current war between steel and aluminum. In future, all producers will use multimaterial methods and designs that employ steel, aluminum, magnesium, reinforced plastics, and carbon fiber composites.

Optimizing this mix will hinge upon employing computer-based engineering tools, while sourcing these materials will require incorporating new players into the automotive supply chain. Prototyping, testing, and even parts manufacturing will require competencies not currently present in the automotive supply chain, much less the OEMs themselves. The microstructures of the materials determine the attributes of the products, but relative to older steels and plastics, these microstructures can be manipulated. For engineers, a good knowledge of steel, and access to an engineering handbook will no longer suffice. Instead their work will hinge upon the artful utilization of software tools that employ finite element analysis (FEA) and computational fluids dynamics (CFD). These skill shifts likewise represent a qualitative change in engineering tasks, and open up the potential for new ways of organizing information and work flows. Parts can be stressed digitally, and virtual cars crash tested. Incremental gains in speed and design effectiveness will come as those involved in vehicle design and engineering learn where they can lessen their reliance on physical validation with prototype parts.

Materials Competition Changes the Supply Chain

Recent decades have seen two transformative paradigms brought to the auto industry by social scientists. One is the impact of lean production models on the auto supply chain and the implications of new governance models; these will be discussed in Chapter 10. The other is the rise of shared engineering responsibilities, as direct “Tier I” suppliers move away from merely producing parts to blueprints supplied by their customers. Unlike the dominant Wintel standard for personal computers, in the automotive industry proprietary product architectures remain central. Nevertheless, over the past three decades suppliers have shifted in the direction of providing modular components, deepened their knowledge of core production technologies, and bringing that knowledge into the design process. The new microstructural materials will reinforce that shift.

Manufacturers must deepen their materials competencies, learning for example how to work with multiphase high-strength steels, but they also need to become competent at multiple materials. The all-steel auto body, which was transformational in the development of the modern assembly process, produced a realignment of production among OEMs and suppliers and the final elimination of craft skills in production of wood bodies. The pursuit of lightweight material manufacturing is likewise embedded in a shift in the structure of the supply chain, in the reorganization of engineering around the use of digital tools, and the expansion of the tasks undertaken by workers, a topic of Chapter 10.

Steel Versus Aluminum and Other New Materials: The Latest Scores

As referenced earlier, shifts in the supply chain began with the introduction of catalytic converters in the United States and Canada for Model Year 1975 vehicles. Over time the supply base expanded to include manufacturers of ceramics and specialized plastics, sensors, microprocessors, solid-state power converters, and other items that came from new players. Some of this was internal to OEMs. Emissions controls required computer-controlled fuel injection, with GM producing their last car with a carburetor in 1990. In that era semiconductor fabs lacked the capacity to make the millions of heat-hardened integrated circuits the industry needed. Hence in the 1980s, the electronics division of General Motors, which is now part of the independent firm Delphi highlighted in the previous chapter, grew to be the fourth largest semiconductor producer in the world.

Metallurgy—steel—was once as much craft as science. That is no longer the case. Advanced materials gain their properties from nanolevel structures that are amenable to control. These structures cannot readily be observed, and are too complex to be adjusted through trial-and-error. Software is required to visualize and manipulate the microstructures and their properties. Figure 8.3, a 1-micron image of an advanced high strength steel, illustrates the composition and distribution of nano-sized particles. Engineering these materials recipes permits the mixing and matching of materials throughout the unibody, reflected in the color-coding in Figure 8.4. It is this capability of creating different materials, and understanding their contribution to vehicle performance, that allows lightweighting.

Figure 8.3 Steel nanostructure

Figure 8.4 Use of different materials in a unibody

This microstructural capability is the basis of a new kind of materials competition. Previously choices about materials hinged on price differentials—steel at $4 per pound, aluminum at $7, carbon fiber at $17 per pound, with modest variations for different grades. Materials choices were straightforward. Now the tradeoffs are more complex, because the cost of incremental weight is higher and the range of materials choices qualitatively far greater. As stated recently by a senior design engineer from Toyota:

While aluminum is lighter than steel, ultra high strength steel coupled with advanced geometrical designs can achieve similar weight savings to aluminum. From our studies we see that aluminum, steel or magnesium sheet—all these different alternatives you can go to—it really comes back to design more than it comes back to material. Mass reduction, specific to material usage, is not simply a battle between steel, aluminum and carbon fiber.

If you are designing properly for the material, you can achieve the proper weight savings. If you just try to make the mass reduction purely by material itself, you’ll reduce weight but won’t optimize it. It all really starts with design.

Toyota, American Metal Market January 13, 2015

Software and digital manufacturing capabilities are the bridge that allows new materials to be brought into a vehicle, but pull in actors across the supply chain. Fifteen years ago, the competition between steel and aluminum was over hoods and liftgates. These are not structural components, so it came down to weight versus cost, rather than materials capabilities. The current battle is over doors, where crashworthiness is important and thus metallurgy matters. With new materials come new manufacturing processes, such as high-pressure tube hydroforming, roll-forming of heavy-gauge material into shapes that approach tubes in strength, induction and friction welding to join complicated shapes and dissimilar materials, and hot stamping to turn medium-strength into high-strength steel. Each have their own fixed-cost structures for the core machinery and the part-specific tooling, and (in an era of world cars) capacity that varies in different parts of the world. Technology is more than blueprints. For the industry to use advanced high-strength steels (AHSS), they also need to educate stamping and tooling engineers and have them accumulate experience with these materials and processes.

Case Study

2014 Honda MDX Door Ring

The ArcelorMittal–Magna–Honda Hot Stamped Door Ring project was a PACE 2014 award winner. It is interesting because it illustrates the close collaboration of OEMs, Tier I suppliers and steel companies whose combined efforts were required in order to use new materials. Through their joint efforts they met the technical challenges of lightweighting while meeting new, more challenging safety regulations, along the way adapting production processes to reduce costs. The case also gives specific examples of the importance of materials science developments and new engineering tools as fundamental facilitators of supply chain-based innovation.

The core technology is hot stamping. In this process, a carefully engineered sheet of multilayer, coated steel is heated red-hot to 900ºC. It is then quenched in a controlled manner in a stamping press. In the process, it transitions from a steel soft enough to be formed in a die into a high-strength steel. This ability to form high-strength steel allows the use of thin gauges in safety-critical locations, trimming weight. The steel producer ArcelorMittal is making a strategic commitment to engineer alloys and rolling processes that create steel microstructures to facilitate hot stamping. This allows them to sell their highest margin steels while improving costs and performance for their customers. However, they had limited experience in automotive parts production, which includes the expertise to meet testing and production validation requirements and not just running a plant. In contrast, the Canadian-based supplier Magna was pursuing a modularization strategy. It is the industry’s third largest supplier, with $32 billion in global sales. In this case, the key supplier was its Cosma division, which developed expertise in specialized press-based processes, and in particular is a leader in hot stamping. Finally, Honda identifies itself as the leader among the OEMs in using high-strength steels. Using hot stamping is fundamental to this, but Honda prefers to rely on outside suppliers.

This all came together with the redesign of the 2014 Acura MDX crossover. It would be one of the first vehicles to face the new small overlap front crash test, which Honda and other manufacturers knew their existing vehicles could not meet. At the same time, for the vehicle to sell well they needed to be best-in-class in fuel efficiency. To meet these twin goals, they wanted to make the door ring (the frame around the driver-side door) out of a single piece of high-strength steel. At the start that appeared impossible, because no steel supplier was able to make a sheet of appropriate steel that large, and no supplier had ever worked with a hot stamping that size.

Between them, Honda, ArcelorMittal, and Cosma arrived at a solution. ArcelorMittal proposed combining a new steel, Ductibor 500P^®, with Usibor 1500P^®, a steel optimized for hot stamping. Through local deformation the softer Ductibor would absorb energy in a side impact, while the stiff Usibor would maintain the shape of the door cage and so protect the driver in the event of a front crash. ArcelorMittal had built a factory to make laser-welded tailored blanks in Ohio in August 2012. This gave them the generic capability to join smaller steel sheets together in a cost-effective manner, particularly as they could combine different grades and gauges to save on weight and lessen scrap. Furthermore, the laser welding of these pieces prior to stamping eliminated the use of spot welds to join the sheets after stamping, which would have been costly and created a zone weaker than the steel on either side. But in this case they had to develop an entirely new process, to handle the coating of these new steels. In turn, Magna had engineered its hot stamp process to handle the large ring of dissimilar steels of different thickness. Honda had to be confident in the engineering of the unibody and that they had correctly simulated how the novel door ring would perform in a crash test. They also had to be confident of their ability to integrate the ring into their body-in-white welding process at the U.S. assembly plant that would be the sole factory globally to make this premium crossover vehicle (Figure 8.5).

Key conclusions can be drawn from the case were: Applying hot-stamped laser-welded blanks helps with weight reduction while improving the material utilization; adding more complexity to the blank further optimizes the material utilization, weight and cost reduction. Laser-welded blanks proved less expensive than the traditional multipiece design. No single party could have developed this approach on their own; all obtained intellectual property in the final design and processes (Figure 8.6).

Figure 8.5 Door ring blank showing weld location and finished ring.

Figure 8.6 Crash test: the door ring held.

Source: Insurance Institute of Highway Safety.

Arcelor Technology Roadmap

The next chapter discusses the automotive strategy of ArcelorMittal in greater detail. This product was linked to a roadmap of future requirements for a body-in-white. That helped ArcelorMittal to focus on the types of steel that would be needed, and then link that to an initial application in a vehicle that they could “shop” to car companies. Some of the metallurgy work drew on their main R&D facility in France, while the steel itself was made in the United States so involved process engineers at that steel mill. The firm’s North American automotive business was headquartered in Ontario, Canada, where Cosma also had its headquarters; ArcelorMittal partners with them to further hot stamping technologies. Honda’s R&D facility for the overall vehicle project was in Ohio, but some of their work on hot stamping was based in Japan. Because Honda is interested in increasing the supply base for hot stamping—and highlighting their superlative performance in the key crash test—they have publicized many details of this project. That in turn is helping ArcelorMittal showcase these new steels, and put them on the path to commercializing other portions of their roadmap.

Magna Road Map

Magna Cosma has been a leader in hydroforming over the past 20 years but sees hot stamping as the next step in the manufacturing process. Moving to hot stamping will in fact reduce the volume of hydroforming, but will draw upon their expertise in specializing stamping processes, and in some cases let them modify their presses to perform the new process. At the same time, they are adapting their use of welding, an inherently dirty process that they can eliminate through hot stamping. In summary, this transition is one that is consistent with industry roadmaps, which undergird their specific strategic focus.

Honda Road Map

Honda had the engineering and market challenge that existing steels had been pushed close to their limit, and would not allow further lightweighting, and indeed could only meet stricter crash standards by adding mass. The need to explore new materials was obvious, and they chose to focus one of their initiatives on hot stamping. They began with several small, relatively uncritical components for lower-volume vehicles, for which they were willing to pay the cost premium as an early adopter in order to obtain production and design experience. Over time, they have gradually expanded their use of hot stampings onto higher-volume vehicles and with safety-critical parts. The 2014 Acura MDX door ring project was at the time their most ambitious use of hot stampings, but was consistent with their roadmap for future needs for strength versus weight. They perceive themselves as a global leader for this technology.

This steel roadmap is not the only route they are taking. The 2014 MDX weight reduction of 123 pounds was achieved through the use of a combination of advanced materials, which made it the lightest vehicle in its class. It also reflected body design concepts based on what Honda calls Advanced Compatibility Engineering. Through ACE, they work to jointly design the elements of the passenger cabin structure for protection in rollovers and front, side, and rear collisions. This entails modeling a variety of materials and joining technologies, and not just welded steel. For Honda, hot-stamped ultra-high-strength-steel (UHHS) may be a key technology, but their roadmap foresees a multi-material body in future vehicle architectures.

Conclusion

New materials and architectures require new joining methods. For example, welding dissimilar materials is challenging, as magnesium and aluminum oxidize easily, while the mix of materials at the weld point creates a structural weakness. Furthermore, moisture leads to galvanic corrosion. Hence some sort of gasket or filler is needed to seal joints. Carbon fiber and plastics need fasteners or adhesives. Lighter materials and unusual shapes also tend to make vehicles noisier, so create a demand for fillers and dampening materials.

That latter need overlaps with safety requirements. Vehicle interiors now need to be padded, to lessen injuries. Headliners can no longer be a simple piece of material to hide the metal of the roof. They also need a layer of foam. Instrument panels not only need foam, but the surface needs to be engineered so that it will tear away to permit an airbag to deploy. Finally, seats are no longer a bit of padding over a wire frame with some cloth on top. They now need to incorporate a range of sensors, motors and can provide automatic adaption to the driver’s body and both active heating and cooling.

In sum, lightweighting and safety requirements have opened the door to an array of other materials suppliers, who are providing highly engineered sealants, adhesives, fillers, spray-on coatings to deaden sound, and foams and plastics for seats and instrument panels. Even carpet is now engineered to use recycled materials and to provide acoustic properties, all while needing to meet standards of durability and stain resistance.

The combination of advances in materials science and engineering tools on the supply side and demands for enhanced safety and lighter weight on the demand side are behind the rise of an array of new technologies. The analysis of finalists in the PACE process help highlight this transition. These new suppliers and business units are part of increasingly decentralized, networked business models. Their knowledge of vehicle technologies is important, from the Body-in-S program of ArcelorMittal to the seat assembly experience of Woodbridge. However, they remain indirect, Tier II- or Tier III-suppliers. The supply chain is becoming more interconnected, with new players and greater interconnectedness central to ongoing innovation.

¹   2016 Steel Industry Technology Roadmap for Automotive. Steel Market Development Institute. www.autosteel.org