Why German Car Aluminium Demand Is Falling as EV Output Climbs

German factories built 1.67 million electric cars in 2025, a 23% jump on the year before. Over the same stretch, the country’s secondary aluminium consumption kept sliding, and domestic smelting has collapsed from about 550,000 tonnes in 2017 to roughly 190,000 tonnes.

If you assume EV growth automatically means more automotive aluminium demand in Germany, those two numbers should give you pause.

Transport absorbed about 1.35 Mt, or 46%, of Germany’s roughly 2.93 Mt of aluminium consumption in 2025. That makes the car industry the demand anchor for the entire German market. The bigger change, though, is no longer how much metal carmakers use but where it comes from: imports, recycled scrap or low-carbon primary production.

Here is a clear read on which parts of the German aluminium chain are growing, which are shrinking for structural reasons, and where the investable exposure actually sits.

Why German aluminium use is falling even as vehicles get more aluminium-intensive

What the consumption data shows

Primary consumption edged up 1.84% to 1.83 Mt in 2025, its first gain in four years. Secondary consumption, meaning metal made from scrap, slipped again to 1.10 Mt, about 14.4% below its 2021 level.

German automotive uses roughly 950,000 tonnes a year, and flat-rolled consumption held steady at 1.68 Mt against 1.66 Mt in 2024. One caution matters here: total consumption, primary, secondary, flat-rolled and domestic production are separate data series built on different definitions. Adding them together produces a number that means nothing.

Cyclical drag versus structural shift

Aluminium Deutschland, the industry association, put the weakness down to soft automotive, construction and plant-engineering demand, high energy costs, scrap shortages and thin policy support. Rolled output in 2025 ran about 12% below 2021, and extruded output about 23.5% below.

Aluminium Deutschland, February 2026 German aluminium production sat at only about 76-88% of 2021 levels.

Yet each vehicle keeps absorbing more metal. A passenger car uses about 210-250 kg of aluminium, which is roughly one-third as dense as steel. Global estimates differ by source: one puts passenger cars at about 60% of automotive aluminium use, while AL Circle Research puts the share at 62% (17.72 Mt). Both are reported because they rest on different bases.

IKB’s view that global demand stays structurally sound reconciles the tension. Intensity is rising; German tonnage is not.

What this tells you is that aluminium per vehicle only converts into German demand when vehicle volumes and industrial output cooperate. The structural change is happening on the supply side.

European energy cost pressures have hit aluminium harder than most industrial sectors, and Germany’s smelter closures sit within a continent-wide pattern of curtailed capacity and rising import reliance.

How does the EV shift and OEM sourcing change what German carmakers buy?

Why EVs pull in more aluminium

The bullish signal is real. Of the 1.67 million electric cars built in 2025, about 1.22 million were battery electric vehicles (BEVs, up 15%) and about 450,000 were plug-in hybrids (PHEVs). The German Association of the Automotive Industry (VDA) expects about 1.76 million in 2026, up 6%, and registrations from January to July 2026 reached 641,000 (+38%), with BEVs at 446,600 (+50%).

Aluminium suits EVs for several reasons:

• Lighter vehicles travel further on a charge, or can carry smaller batteries
• It is used in battery enclosures, motor housings, castings and cooling systems
• Both primary metal (newly smelted) and secondary metal (from scrap) can meet automotive specifications, provided the alloy requirements are met

That last point matters. Total German vehicle production remains below pre-crisis levels, so the real shift is in the type of aluminium carmakers want.

Aluminium suits EV platforms partly because manufacturing methods such as giga-casting consolidate dozens of stamped parts into single large castings, which raises aluminium content per vehicle and rewards suppliers that can guarantee consistent alloy chemistry.

How the big three buy

VW’s closed loop began at Audi Neckarsulm in 2017 and extended to Audi Münchsmünster and VW Emden in 2024. A 2026 low-carbon supply agreement was reported, but supplier, volume and price remain undisclosed. BMW’s Car2Car project lifted end-of-life recovery potential from 23% to 52%.

The read you should take: procurement value is moving toward suppliers that can certify provenance and alloy quality. Closed-loop scrap commands a premium over mixed post-consumer scrap because its chemistry is known, which favours integrated recyclers and low-carbon producers over commodity smelters.

Who is building the recycling capacity, and does it solve the supply problem?

The capacity build-out

The starkest move came at Neuss, where Speira ended primary electrolysis entirely because of energy costs.

Speira’s Rheinwerk conversion A former smelting site is becoming a recycling hub, with a €40 million fourth furnace adding about 60,000 t/year, inaugurated on 8 October 2026.

Speira still rolls about 1 Mt a year and runs the Alunorf joint venture with Novelis. Hydro’s Rackwitz site processes about 85,000 t of scrap annually (about 20,000 t from end-of-life products) and supplies REDUXA and CIRCAL metal to Mercedes-Benz and Porsche.

Trimet’s plant uses LIBS (laser-induced breakdown spectroscopy, which reads a scrap piece’s chemical makeup with a laser pulse) to detect silicon, copper, iron and magnesium. Its investment cost was not publicly found. The fact that a producer is spending upstream on sorting tells you scrap quality, not furnace capacity, is the binding constraint.

Where recycling runs out

Aluminium Deutschland reports scrap shortages and sharply higher scrap prices. Mixed scrap can downgrade output or need dilution with primary metal, and closed-loop volumes are capped by how much carmakers actually stamp.

No authoritative figures exist for German scrap exports, so leakage remains unmeasured.

Scrap leakage to overseas buyers is a recognised drain on European recyclers, and the absence of authoritative German export figures makes it harder to size how much feedstock is being lost.

For your purposes, these projects show where European aluminium capital is going. Test any recycling investment on two points: secured feedstock and alloy control. Capacity without scrap access is a risk to returns.

Can energy relief and higher prices bring German primary smelting back?

Price strength versus power cost

The price signal looks encouraging. LME aluminium traded around US$3,165/t in July 2026, against roughly US$2,200/t at the start of 2024, according to Reuters.

It has not been enough. Reuters reported that power costs and EU emissions rules keep European smelters disadvantaged, and while some idle Western smelters are restarting, European capacity stays deterred where electricity economics fail.

Policy relief and its limits

Germany’s industrial electricity relief, as outlined by law firm Taylor Wessing on 24 April 2026, works like this:

• Up to a 50% reduction of the wholesale price
• Applied to up to 50% of annual consumption
• A price floor of €50/MWh
• Retroactive from 1 January 2026 to the end of 2028
• Subject to eligibility and EU state-aid approval

This is targeted aid, not a universal industrial tariff, and smelters remain exposed to power-price swings. Industry representatives argue the EU’s Carbon Border Adjustment Mechanism (CBAM, a levy on the carbon content of imports) could worsen Germany’s position, and IKB flags rising import dependence, though no attributable Chinese import volumes for 2025-2026 were found.

The Speira lesson Higher aluminium prices did not keep primary electrolysis running at Neuss while power and emissions costs stayed uncompetitive.

Domestic primary output has already fallen from about 550,000 t to about 190,000 t, per IKB. What this tells you is that exposure to German smelting is a power-policy bet, not an aluminium-price bet. Secondary and low-carbon chains carry the nearer return profile.

For readers weighing the policy risk, our detailed coverage of aluminium CBAM and tariff strategy sets out how carbon pricing and trade measures reshape competitiveness for producers.

What the German aluminium shift means for how you position

The through-line holds across every layer: aluminium per vehicle is rising, German primary output is shrinking, and recycling is the most bankable response.

Your watchlist should cover:

• Electricity costs and EU approval of the relief scheme
• Scrap availability and pricing
• CBAM phase-in and trade policy
• German industrial demand and VDA order intake

This is an analytical thesis built on data with stated gaps, including scrap exports, import volumes and aluminium-to-steel substitution. Past performance does not guarantee future results, and forward-looking statements are subject to change with market developments.

The decision point is not whether EVs need aluminium. It is whether the suppliers you hold control the scrap and the power price that decide who gets paid for it.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions.