The automotive industry needs to lose weight. Lighter cars and trucks use less fuel. Less fuel means that automotive companies can meet their corporate average fuel economy (CAFE) requirements by selling higher margin, larger vehicles, rather than lower margin small cars.
There are expensive ways of losing weight, such as by using carbon fibre and aluminum. But no one wants to spend money unnecessarily and these fancy materials are hard to form and expensive to repair. It would be much better if good old steel just got lighter.
That is exactly what has happened. Our portfolio company NanoSteel, AK Steel and General Motors (GM) have just jointly announced the first shipment of NanoSteel’s new design of steel, which allows lighter-weight cars to be made with conventional manufacturing technology. This unique material combines all of the desirable properties sought by the automotive industry in a new breed of steel.
What are these desirable features?
First, NanoSteel has incredibly high strength, allowing parts to be made with thinner gauge material. Thinner gauge means lighter vehicles, but higher strength means there is no sacrifice in performance. In fact, a lighter NanoSteel chassis means lighter suspension, lighter brakes, lighter engine, lighter wheels in a virtuous cycle of weight and cost saving.
Second, the NanoSteel material is extremely ductile, ten times more ductile than other high strength steels. This ductility is very desirable as it allows automotive parts to be cold stamped using rapid manufacturing techniques. Other high strength steels can only be hot stamped, which wastes energy and wastes time due to heating and cooling. More importantly, hot stamping increases the takt-time, in other words, it slows down the production rate, requiring many more machines to produce the same quantity of product. More machine increases the capital, labor and land costs. NanoSteel’s cold stamping materials avoid all these costs.
Third, no headaches. NanoSteel can achieve the same weight-saving performance as aluminum without the manufacturing, welding and repair headaches created by aluminum. It is well known that people buying the new Ford F-150 suffer large repair bills when they go to the shop. See “Ford F-150 aluminum repairs cost more than steel.”
Fourth: safety. Steel has the best energy absorption capability to protect passengers in a crash. NanoSteel’s material, with its high strength and high ductility is especially suited to this task, leading to lighter weight without sacrificing safety.
Fifth: cost. Steel costs less than aluminum and much less than carbon fibre. NanoSteel provides superior performance without hurting the consumer’s pocket book. In fact NanoSteel helps the pocket book because fuel savings are provided while reducing the cost of vehicles through weight savings.
Overall, this is a win-win-win-win scenario. The consumers win by having a lighter, safe, cost effective vehicle. GM and the automotive companies win by meeting their CAFE standard with a higher profitability mix of vehicles. AK steel and the steel industry wins by having a product that is the most attractive for the automotive industry. The planet wins by having lower emissions.
At Chrysalix we recognized the opportunity that NanoSteel presented over half a decade ago. The company fitted our profile of low market risk while presenting technology challenges. Along with our investment partners, we took on the technology risks and are thrilled to see NanoSteel and AK Steel deliver the finished product to GM. It is great to have such committed partners at GM and AK Steel in bringing to market a unique material that provides significant benefits to the world.