Key Takeaways:
A growing list of automakers is replacing copper wiring with cheaper, lighter aluminum — a shift that could reshape demand for two of the world's most important industrial metals.
Ferrari and BMW are rolling out new models featuring aluminum wiring, joining Tesla and Chinese EV makers in a substitution wave that JPMorgan estimates will affect about 2% of global copper demand this year and potentially 6% by 2030. The moves come as copper prices hover near record highs above $15,000 per metric ton, more than four times the price of aluminum.
"The cost gap has become too wide to ignore for high-volume applications," said Terry Woychowski, president at engineering consultancy Caresoft Global, which tears down vehicles to examine their components. "Chinese EV makers including AVATR, XPeng and Xiaomi have already made the switch, and the economics are compelling for anyone building at scale."
Ferrari started using aluminum for power cables on its 296 hybrid sports car last year and has since expanded the practice to other models including the Luce, its first all-electric vehicle launched last month. The switch saves 15% to 20% of total wiring weight, according to Dario Esposito, a Ferrari communications executive. BMW first used aluminum conductors in 2011 in its subcompact 1 Series and now employs the material extensively in both high and low-voltage systems across its latest eDrive EV technology. Stellantis, the world's fourth-largest automaker, also recently began swapping copper for aluminum, according to an industry source.
Price Ratio Drives the Math
The economics of substitution hinge on the copper-to-aluminum price ratio. Industry sources say manufacturers begin evaluating the switch when copper reaches 3.5 to 4 times the price of aluminum. That ratio hit a record 4.3 in January and currently stands at about 4.2, with copper at roughly $6 per pound and aluminum below $1.50 per pound.
Aluminum has only 61% of copper's electrical conductivity, meaning conductors must be about 1.6 times larger to carry the same current. But aluminum is about 3.3 times lighter than copper, making it especially attractive for EVs where weight reduction translates directly into longer driving ranges. Chinese EV makers, operating in a market where a price war has squeezed margins to razor-thin levels, have been among the fastest adopters.
China's government encouraged the shift in a March 2025 policy paper, and the country's EV parts suppliers are responding. JONVER, a Chinese supplier of aluminum wiring products, saw sales jump to about 30% of its total revenue this year from roughly 20% in 2023, sales director Feng Lu said.
Tesla has been a pioneer in aluminum use, introducing aluminum wiring in its Model Y in 2019 and more recently in the Cybertruck. The company holds patents on aluminum alloys with high electrical conductivity, giving it a potential cost advantage as the industry transitions.
Still Room to Grow
Despite the momentum, about 85% of electrical wiring busbars — which connect an EV's battery to its systems — are still made of copper, according to Norwegian aluminum producer Hydro. The company's CFO, Trond Olaf Christophersen, said Hydro expects to gain market share as aluminum rapidly replaces copper in the heating and air conditioning sectors as well.
The substitution is not limited to autos. Daikin Industries, the world's largest air conditioning manufacturer, said in its 2025 annual report it was "maximizing cost reductions by switching from copper to aluminum." Lennox International and Carrier Global have also moved to aluminum coil technology for certain products. In electrical grids, Nexans, the world's second-largest cable manufacturer, expects aluminum to capture a growing share of the roughly 10 trillion euros in global grid investment projected by 2030.
Not all automakers are on board. Volkswagen said it has no concrete plans to broadly replace copper with aluminum for wiring, though it uses the material in certain applications. Toyota said it evaluates various materials and may adopt aluminum depending on the application.
Investor Implications
For Tesla, the shift offers a modest cost advantage. The company's shares rose 2.1% to $420.60 on Tuesday following an 8.5% gain Monday, as investors await second-quarter delivery results expected Thursday. Analysts project about 409,000 vehicles sold, up from 384,000 in the same period last year.
For copper producers, the trend represents a slow but real demand risk. JPMorgan outlined a scenario in which about 6% of annual copper demand could be replaced by aluminum by 2030, up from 2% this year. Analysts at Chinese consultancy Zhuochuang forecast that 25% to 30% of components currently made from copper could be switched to aluminum in the power, automotive and home-appliance sectors by 2030.
Aluminum producers stand to benefit. Hydro shares have gained on the substitution narrative, while copper miners face questions about long-term demand growth from the EV sector — one of the metal's most promising new markets.
This article is for informational purposes only and does not constitute investment advice.
