Novelis CEO sees electric cars energizing aluminum makers

Aluminum makers, already benefiting from increased use of aluminum by auto makers, stand to gain further from growth in the electric car industry, Phil Martens, the chief executive of Novelis Inc., and a former Ford Motor Co. executive, said in an interview.

Novelis, a unit of Hindalco Industries Ltd. , has invested over $550 million since 2011 to increase auto sheet production capacity in upstate New York, Germany and China, to produce more aluminum for cars. The company is now looking at further expanding production in the U.S. “I wish we had 100,000 tons more capacity,” Mr. Martens said. “We’re clearly looking at what to do next.”

Electric cars are still a fledging, niche industry—and one that already uses aluminum. Tesla Motors Inc. makes its Model S sedan and forthcoming Model X sport utility out of aluminum, and has forecast substantial growth globally for its vehicles.

“You’re going to have a whole new infrastructure with lightweight structures,” said Mr. Martens, mentioning plans by Google Inc. to build a self-driving cars and unconfirmed media reports that Apple Inc. is working on an electric car. “And we expect it will be very aluminum intensive.”

Several other longer-range electric cars set to debut over the next several years could take advantage of aluminum’s lightweight characteristics, although many question whether these cars can attract a mass audience, based on sales so far.

Already, mainstream car makers, led by Ford with the F-150, are ramping up their use of aluminum as they try to meet new government fuel efficiency standards by making cars lighter; 18% of all vehicles in the U.S. will have all-aluminum bodies by 2025, compared with less than 1% now, according to Ducker Worldwide, a consulting and market research firm.

Aluminum is still more expensive than steel, limiting its use so far in developing world markets. Weight and fuel savings make up for the few hundred additional dollars it costs to make a car out of aluminum, Mr. Martens said. “That’s why this is a global company with a global manufacturing strategy,” he said. “Our China facility will be sold out.”

One area where Novelis is trying to do more research is in developing new bonding and adhesive technologies, said the CEO.

Novelis last month reported a net profit of $46 million in the third quarter of the 2015 fiscal year, up from $13 million in the same period in 2014. Revenue increased 18% to $2.85 billion from $2.4 billion, thanks to a 5% increase in shipments of rolled aluminum products to 757,000 tons from 721,000 tons.

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