Global EV sales exceeded 17 million units in 2024, representing roughly 20% of all passenger vehicle sales. By 2030, EVs are projected to account for 40% to 50% of new vehicle sales in North America. This transition is not reducing steel demand from the automotive sector. It is changing what types of steel the sector needs.
How EV Steel Differs
A conventional internal combustion engine (ICE) vehicle uses approximately 900 to 1,000 kg of steel. An electric vehicle uses approximately 800 to 900 kg of steel. The reduction comes from eliminating the engine block, transmission, exhaust system, and fuel system. But the EV adds new steel-intensive components that partially offset those losses.
Battery enclosures are the largest new steel component. A battery pack housing for a mid-size EV uses 80 to 120 kg of advanced high-strength steel (AHSS) in grades like DP590, DP780, and DP980, as well as press-hardened steel (PHS) like 22MnB5. These grades provide the crash protection required for a battery pack that sits under the passenger compartment. The structural requirements are extreme: the enclosure must survive a side-impact collision without allowing the battery cells to be compromised.
Motor housings for EV drive units use electrical steel (silicon steel) for the motor laminations and machined steel for the housing structure. Electrical steel demand has surged with EV production, creating supply constraints in specific grades that were previously niche products for the transformer and generator market.
Structural reinforcements are heavier in EVs because the battery pack adds 400 to 700 kg of weight to the vehicle floor. To maintain crash performance with this added mass, EV structures use more AHSS and PHS in the body-in-white (BIW) than equivalent ICE vehicles. The AHSS content in an EV can be 30% to 50% higher than in a comparable ICE vehicle.
What This Means for Service Centers
Most of the steel used in EV manufacturing goes through Tier 1 automotive suppliers who buy mill-direct in large volumes. Service centers do not typically supply EV body panels or battery enclosure stampings directly. However, the EV supply chain creates downstream opportunities.
Tier 2 and Tier 3 suppliers who make EV components (brackets, structural reinforcements, cooling system parts, charging hardware, motor mounts) often buy from service centers because their volumes are too small for mill-direct programs. These suppliers need specific grades of AHSS, stainless steel, and aluminum in smaller quantities, slit to width or cut to blank.
The EV aftermarket is beginning to emerge. As EVs age, they need replacement parts: suspension components, body panels, structural repairs. The aftermarket parts manufacturers who serve this segment buy from the same service center supply chain that serves ICE aftermarket manufacturers.
Electrical Steel Opportunity
Electrical steel (non-grain-oriented silicon steel in grades M19, M27, M36, and others) is used in EV motor laminations. Demand has grown so rapidly that the major producers (Cleveland-Cliffs, Nippon Steel, POSCO) have invested billions in new electrical steel capacity. Service centers that stock or can source electrical steel in the thinner gauges (0.014 to 0.025 inch) used in high-efficiency EV motors are positioned for a niche market with strong margins and limited competition.
The EV transition is not a threat to steel demand. It is a demand shift that rewards distributors who understand the new product requirements and position their inventory accordingly. The total tons consumed by the automotive sector may decline slightly per vehicle, but the value per ton increases as conventional grades are replaced by advanced high-strength and specialty products that carry higher margins.