Recovery of light vehicle production will be gradual and with notable regional differences. China, a large developing market where the effects of the coronavirus were felt first, is expected to fully recover to 2017 levels by 2022. Vehicle demand in mature markets, such as the European Union and North America, was softening before the pandemic and will not return to 2017 levels before 2025. The road to recovery will be long and slow for suppliers of automotive commodities that rise and fall with the market.

Fortunately, many composite materials are not commodities, but are gaining market share due to the value they offer versus competing materials in terms of cost, weight and performance. Demand for lightweight materials is outpacing market growth due to regulations on carbon dioxide emissions and fuel economy. Limits on carbon dioxide emissions in Europe are set to tighten over 60% between 2021 and 2030.

The United States is likely to revisit the pause placed on Obama-era fuel economy standards, which could require a 23% improvement in fleet fuel economy between 2020 and 2025. The use of lightweight materials, including composites, can assist OEMs in meeting regulations while retaining consumer appeal. Prior efficiency regulations helped composites gain 2% of vehicle mass each year from 2008 to 2018, a trend that is likely to continue in light of the current regulatory environment.

However, lightweight materials alone will not enable OEMs to meet lofty fuel economy requirements. As a result, automakers are planning to deploy a new mix of electrified vehicle powertrains in the next few years. This will include significant increases in hybrid, battery electric and fuel cell vehicles to complement internal combustion engines.

The rise of electrified vehicles creates opportunities for composites in battery enclosures, hydrogen fuel tanks and other components where low weight and corrosion resistance are required. In addition, part consolidation opportunities can be exploited as these new vehicles are designed. These factors may enable composites to capture additional share of vehicle mass in the next decade and will help drive the total volume of automotive composites sold above 2017 levels by 2023.

The growth potential of the composites industry is illustrated by indexing vehicle production and automotive composites volume to a base year of 2017 and projecting demand through 2025. (See Figure 2.) Should composites continue to grow 2% above the market each year, as they have for the past decade, automotive composites volume will eclipse the base year by 2023, while global automotive production is not expected to return to its 2017 level before 2025.