How Competition is Making Us Stronger Proponents of supply-side economics believe that one of the foundations of a strong economy is competition. Where companies are forced to compete with one another, that competition leads to better products, lower prices, and constant innovation.
Supply-side economics aside, we have definitely seen the power of competition in our own industry. Some of the fiercest competition we face is found in automotive applications. We are constantly competing with steel and aluminum makers for a larger share of the automotive manufacturing market. We are confident in saying that competition is making all of us stronger. As far as carbon fiber and other composites are concerned, having to compete with automotive steel and aluminum forces us to find new and better ways of doing things. We have seen a lot of great changes in the composites arena just from this competition alone. Bringing the Price Down Many in our industry view automotive manufacturing as the holy grail of carbon fiber. As the thinking goes, our industry can make great strides forward if we can convince auto makers to abandon most of their steel and aluminum in favor of carbon fiber. That would give us a much larger customer base while generating the revenue our industry needs to grow and expand. So what has been holding us back? Prices. For the longest time, carmakers could not justify using large volumes of carbon fiber because it's just too costly. They absolutely love the material but using too much of it would price a new car right out of the market. Competing with steel and aluminum has forced our industry to look for cheaper ways to manufacture with carbon fiber. And guess what? We are succeeding.
The introduction of new processes like injection molding, 3D printing, and pressed carbon fiber fabricating are helping us make the price gains we need. A recent example is found in the new 2019 GMC Sierra with the carbon fiber bed liner. The bed liner still adds to the price of a Sierra, but the cost of the liner itself is now affordable enough that GMC isn't afraid to use it in several of their future pickup trucks. Designing Lighter Steel Data shows that the tide is beginning to turn in favor of carbon fiber. For example, a recent article published by Car Scoops cites data that shows carmakers are adopting more carbon fiber and using less steel. The data suggests that 70% of the weight of a typical car in 2015 was attributed to steel. That number is expected to fall to 62% by 2025. Car Scoops says the steel industry is concerned about losing automotive business to carbon fiber. But they are not sitting still. Steelmakers are working on innovative ways to make lighter grades of steel that still offer the structural integrity their customers need. They are also developing ways to use lighter grades in some areas so that heavier, stronger grades can be used elsewhere. All of this innovation was brought to life in a concept vehicle built by Nippon Steel earlier in 2019. The body of the car was upwards of 30% lighter than a traditional steel body. Moreover, it was about the same weight as an aluminum body. Nippon Steel and others in the steel industry are being forced to compete with carbon fiber for automotive applications that require lighter weights without any loss of strength or durability. Innovations in carbon fiber are forcing steelmakers to compete. Likewise steel industry innovations are forcing us to compete as well. And in the end, we are all better off for it.